What right does the Checkersrallys franchise agreement provide to the franchisee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreement provides the franchisee the right to construct, own, and operate a Checkers or Rally's restaurant upon a site accepted by the Company and to use the Checkers and Rally's system in connection with the operation of the restaurant at that site. The franchise agreement generally provides for a 20-year term and a 10-year renewal subject to certain conditions. The franchise agreement contract performance obligation is considered to be a right to use the Company's symbolic intellectual property over the contractual term.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchise agreement grants the franchisee the right to construct, own, and operate a Checkers or Rally's restaurant at a site approved by Checkersrallys. This also includes the right to use the Checkers and Rally's system in connection with the restaurant's operation at the specified location.
The franchise agreement typically has a fixed term, often 20 years, with an option for a 10-year renewal, contingent upon meeting certain conditions. Checkersrallys considers the core performance obligation of the franchise agreement to be granting the franchisee the right to use Checkersrallys's symbolic intellectual property throughout the contractual term.
In essence, this means a franchisee is buying the right to establish and run a Checkersrallys restaurant using the company's brand, operational systems, and intellectual property, subject to the terms and conditions outlined in the franchise agreement. The franchisee's ability to maintain this right depends on adhering to the agreement's stipulations and achieving renewal requirements.