Under what conditions will Checkersrallys grant me franchises within the Development Area?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
g development schedules for such restaurants, will be set out in Exhibit A to the Development Agreement (the "Development Schedule").
You will not receive an exclusive territory in the Development Area. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. During the term of the Development Agreement, as long as you and your affiliates are in compliance with the agreement and all other agreements with us or any of our affiliates (including Franchise Agreements signed under the Development Agreement), we will: (a) grant to you, in accordance with Section 3 of the Development Agreement, at least that cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area (the locations of which we will approve in accordance with our then current criteria for selection of a Checkers Restaurant or Rally's Restaurant site); and (b) not operate (directly or through an affiliate), nor grant the right to operate, any Checkers Restaurants or Rally's Restaurants located within the Development Area, except for: (1) franchises granted pursuant to the Development Agreement; (2) Restaurants open (or under commitment to open) as of the date of the Development Agreement; (3) Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites; and (4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as Checkers Restaurants or Rally's Restaurants using any of the
Marks and/or the System or whether such restaurants operate under other trademarks, service marks or trade dress and/or use other operating systems.
Except as otherwise expressly provided in the Development Agreement, we and all of our affiliates (and our or their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the System and Restaurants anywhere in the world, and the right to engage in any business whatsoever (without compensation to you), including the right to: (a) operate, and grant to others the right to operate, Restaurants at such locations and on such terms and conditions as we deem appropriate;
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the company will grant you franchises within the Development Area if you and your affiliates are in compliance with the Development Agreement and all other agreements with Checkersrallys or its affiliates. This includes Franchise Agreements signed under the Development Agreement. Checkersrallys will grant at least the cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area. The locations must be approved by Checkersrallys in accordance with their then-current criteria for site selection.
However, this grant is subject to certain exceptions. Checkersrallys retains the right to operate or grant the right to operate Checkers Restaurants or Rally's Restaurants within the Development Area under specific circumstances. These circumstances include franchises granted pursuant to the Development Agreement, Restaurants open (or under commitment to open) as of the date of the Development Agreement, Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites, and restaurants that Checkersrallys purchases (or as to which they purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as Checkers Restaurants or Rally's Restaurants using any of the Marks and/or the System or whether such restaurants operate under other trademarks, service marks or trade dress and/or use other operating systems.
It is important to note that you will not receive an exclusive territory in the Development Area, meaning you may face competition from other franchisees, outlets owned by Checkersrallys, or other channels of distribution or competitive brands controlled by Checkersrallys. Furthermore, you must be developing, or have open and operating in the Development Area, at least the cumulative number of Checkers Restaurants or Rally's Restaurants set out in the Development Schedule. Failure to do so will be a material breach of the Development Agreement, although Checkersrallys's right to terminate the Development Agreement will be their exclusive remedy for your failure to meet the Development Schedule.