What actions by a Churchs Chicken developer's Operating Principal or 5% Owner could lead to termination of the Development Agreement?

According to Churchs Chicken's 2025 Franchise Disclosure Document, the actions of an Operating Principal or a 5% Owner can lead to the termination of the Development Agreement under certain circumstances. Specifically, if the Operating Principal or any 5% Owner remains in default beyond the applicable cure period under any agreement with Cajun or its affiliates, including Development Agreements, Franchise Agreements, Promissory Notes, or Guaranties, it can trigger termination. However, if the default is not by the Developer itself, Churchs Chicken must provide the Developer with a notice of the default and a 30-day period to cure the default before termination.

This also applies if there is a default under any real estate lease, equipment lease, or financing instrument relating to a Franchised Restaurant, or under any contract with any vendor or supplier to a Franchised Restaurant. Again, if the default is not by the Developer, the Developer is given notice of the default and 30 days to cure it. Furthermore, if the assets, property, or interests of the Developer, any Continuity Group member, or any guarantor are blocked under laws relating to terrorist activities, or if they violate any such law, it can lead to termination.

These stipulations are important for prospective Churchs Chicken developers to understand, as the actions of key individuals associated with the development can have significant consequences, potentially leading to the termination of the Development Agreement. Developers should ensure that all parties involved are aware of and compliant with all agreements, legal requirements, and contractual obligations to avoid such defaults.