Under the Checkersrallys agreement, what is prohibited regarding contact with customers of Restaurants after the expiration or termination of employment, association, service, or ownership participation?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the expiration or other termination for any reason of my employment, association, service or ownership participation, I agree:
(i) to return immediately to Franchisor or Franchisee, as the case may be, all Confidential Information, and any material(s) containing a subset thereof, in my possession that was utilized, or to which I had access,
- during my employment, association, service or ownership participation;
- (ii) to refrain, beginning upon such expiration or termination and forever thereafter, from any and all contacts with customers of Restaurants for any purpose whatsoever; and
- (iii) for a period of two (2) years, starting on the effective date of termination or expiration of my employment/service/association or ownership participation, to refrain from directly or indirectly (such as through any one or more of my spouse, legally-recognized domestic partner, parents, children or sibling(s) (collectively, "Immediate Family")) owning a legal or beneficial interest in, or render services or give advice to: (a) any Competitive Business operating at the Premises or within a three (3)-mile radius of the Premises; (b) any Competitive Business operating within a radius of three (3) miles of any Restaurant in operation or under construction on the effective date of termination or expiration of my employment/service/association/ ownership participation; or (c) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, upon the expiration or termination of employment, association, service, or ownership participation, individuals are prohibited from any contact with customers of Restaurants for any purpose whatsoever, beginning immediately after termination and continuing indefinitely. This restriction applies to anyone who has been employed by, associated with, served, or had ownership participation in a Checkersrallys franchise.
This means that a former franchisee, employee, or anyone associated with a Checkersrallys restaurant is permanently barred from contacting Checkersrallys customers for any reason. This includes solicitation, marketing, or any other form of communication. The purpose of this clause is likely to protect Checkersrallys' customer relationships and prevent unfair competition by those who have gained knowledge of the business through their association with the franchise.
For a prospective Checkersrallys franchisee, this clause highlights the importance of carefully considering the implications of exiting the franchise system. It also underscores the value Checkersrallys places on its customer base and the measures it takes to safeguard those relationships. Franchisees should ensure that their employees and associates are aware of this restriction to avoid potential legal issues down the line.