Can Cajun assign its option to purchase assets from a Churchs Chicken franchisee to another entity?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Upon the expiration or termination of this Agreement, for any reason, Cajun shall have the option to purchase from Franchisee some or all of the assets used in the Franchised Restaurant ("Assets"), including, without limitation, leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory (non-perishable products, materials and supplies) used in the Franchised Restaurant, the real estate fee simple or the lease or sublease for the Franchised Location, as applicable, and any governmental approvals necessary to operate the Franchised Restaurant.
If Cajun intends to exercise its option, Cajun must give notice to Franchisee within 30 days after the effective date of termination or expiration.
Cajun may assign this option to purchase the Assets to another person or entity.
Cajun or its assignee shall be entitled to all customary representations and warranties as to: (1) ownership, condition and title of the Assets; (2) liens and encumbrances on the Assets; (3) compliance with environmental laws at, in or upon the Franchised Location; and (4) validity of contracts and liabilities inuring to Cajun or affecting the Assets, whether contingent or otherwise.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, Cajun, the franchisor, has the option to purchase a franchisee's assets upon the expiration or termination of the franchise agreement. This includes assets used in the franchised restaurant such as leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, inventory, real estate, leases, and governmental approvals.
The FDD states that Churchs Chicken (referred to as Cajun in the document) can assign its option to purchase these assets to another person or entity. If Cajun intends to exercise its option, it must notify the franchisee within 30 days after the effective date of termination or expiration of the franchise agreement.
Furthermore, Cajun or its assignee is entitled to customary representations and warranties regarding the assets. These include assurances about the ownership, condition, and title of the assets, any liens or encumbrances on them, compliance with environmental laws at the location, and the validity of contracts and liabilities affecting the assets.