Does Checkersrallys have a specific addendum to the Franchise Agreement for franchises operating at non-traditional sites?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT B-3
NON-TRADITIONAL SITE
ADDENDUM TO FRANCHISE AGREEMENT
NON-TRADITIONAL SITE ADDENDUM TO FRANCHISE AGREEMENT
"Non-Traditional Sites" – Any sites, locations or venues that independently generate customer traffic flow separate from the general customer traffic flow of the surrounding area, or by their nature are not tied to a particular physical location, including, without limitation: military bases; large big-box retail outlets; transportation-related venues (e.g., airports, train or bus stations, marinas, travel plazas or toll roads); sports or entertainment venues (e.g., stadiums, arenas, concert halls); major industrial or office complexes, hotels, educational facilities (e.g., school, college, and university campuses); casinos; hospitals and related rehabilitation or healthcare facilities; governmental institutions; amusement or recreational facilities (e.g., theme parks, outdoor municipal parks, zoos, or museums); grocery stores or departments stores; mobile-based channels of distribution (e.g., roving food trucks); and any co-branding locations or business endeavors where a Restaurant's operations are inextricably associated with, or such operations are contained within or sharing the same physical building or operational premises as, another business (such as, for example and without limitation, a gas/convenience store or another restaurant concept).
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- Reduced Fee(s). The following fees are modified in the Franchise Agreement to reflect Franchisee's operation of the Restaurant from a Non-Traditional Site:
- a. Initial Franchise Fee: Section 6.01 is revised to the extent necessary to reflect that the Initial Franchise Fee due is reduced by fifteen thousand dollars ($15,000) (the "Initial Fee Reduction") from the standard amount of the current initial franchise fee otherwise due for a new Restaurant.
b. Royalty: Section 6.02 is revised to the extent necessary to reflect that the royalty fee payable shall be equal to two percent (2%) of Net Sales; and Franchisee acknowledges and agrees that it will not receive any territorial protection or exclusivity under this Addendum or the Franchise Agreement when operating the Restaurant at a Non-Traditional Site and that Franchisor and its Affiliates retain all rights and discretion with respect to the Marks, the System, the sale of products and services similar or dissimilar to those offered by "Checkers" and "Rally's"-branded restaurants, and the operation or franchising of "Checkers" and "Rally's"-branded restaurants anywhere located or to be located, and may engage in any business activities whatsoever, whenever and wherever they desire during the Term.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, there is a specific addendum to the Franchise Agreement for franchises operating at non-traditional sites. This addendum modifies the standard Franchise Agreement to account for the unique aspects of operating a Checkersrallys restaurant at locations such as military bases, airports, or entertainment venues.
The Non-Traditional Site Addendum addresses several key areas. It modifies the initial franchise fee, reducing it by $15,000 from the standard amount. It also adjusts the royalty fee, setting it at 2% of Net Sales. This reflects the different operational dynamics and potential revenue streams associated with non-traditional locations.
The addendum also clarifies that franchisees operating at non-traditional sites do not receive territorial protection or exclusivity. Checkersrallys retains the right to operate or franchise other restaurants, including those that may compete directly with the franchisee's location, without any obligation or liability to the franchisee. This lack of exclusivity is a critical consideration for prospective franchisees, as it means they may face competition from other Checkersrallys locations, even within the same non-traditional site.
The document defines "Non-Traditional Sites" as locations that generate customer traffic independently of the surrounding area, or are not tied to a particular physical location. Examples include military bases, airports, big-box retail outlets, transportation venues, sports and entertainment venues, industrial complexes, hotels, educational facilities, casinos, hospitals, governmental institutions, amusement parks, grocery stores, mobile food trucks, and co-branding locations. This broad definition highlights the diverse range of locations that Checkersrallys considers as non-traditional, each requiring specific considerations outlined in the addendum.