How must Cajun pay for the assets when purchasing them from a Churchs Chicken franchisee?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. Within 10 days after the Purchase Price has been determined, Cajun may exercise its option to purchase the Assets by so notifying Franchisee in writing ("Cajun's Purchase Notice").
The Purchase Price shall be paid in cash or cash equivalents at the closing of the purchase ("Closing"), which shall take place no later than 60 days after the date of Cajun's Purchase Notice.
Cajun may require Franchisee to close the Franchised Restaurant after the date of the Cajun's Purchase Notice without removing any Assets from the Franchised Restaurant.
If Cajun does not require such closing, then Franchisee shall operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business and maintain in full force all insurance policies required under this Agreement, and Cajun shall have the right to appoint
a manager, at Cajun's expense, to control the day-to-day operations of the Franchised Restaurant. Franchisee shall cooperate, and instruct its employees to cooperate, with such manager appointed by Cajun.
- F. For a period of 30 days after the date of Cajun's Purchase Notice ("Due Diligence Period"), Cajun shall have the right to conduct such investigations as it deems necessary and appropriate to determine: (1) the 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; (4) the validity of contracts and liabilities inuring to Cajun or affecting the Assets, whether contingent or otherwise, and (5) such other matters of due diligence as Cajun may determine.
Franchisee will afford Cajun and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operations of the Franchised Restaurant.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, if Cajun exercises its option to purchase a franchisee's assets, the purchase price must be paid in cash or cash equivalents at the closing of the purchase. This closing must occur no later than 60 days after the date of Cajun's Purchase Notice.
Cajun has the option to require the franchisee to close the franchised restaurant after the Purchase Notice date without removing any assets. If Cajun does not require this closing, the franchisee must continue operating the restaurant and maintain the assets in the usual course of business, keeping all insurance policies active. In this case, Cajun has the right to appoint a manager, at Cajun's expense, to oversee the restaurant's daily operations, and the franchisee must cooperate with this manager.
Additionally, for 30 days after the Purchase Notice date, Cajun has the right to conduct investigations to determine the ownership, condition, and title of the assets; any liens or encumbrances on the assets; compliance with environmental laws; the validity of contracts and liabilities; and other due diligence matters. The franchisee must allow Cajun and its representatives access to the restaurant to conduct these inspections, provided it does not unreasonably interfere with the restaurant's operations.