What conditions must a Churchs Chicken franchisee meet to avoid being in material default during a transfer?

According to the 2025 Churchs Chicken Franchise Disclosure Document, a franchisee must meet specific conditions to avoid being in material default during a transfer. One key condition is that the franchisee must not be in material default of any provision within the Franchise Agreement or any other agreements with Cajun or its affiliates. This extends to not being in default beyond the applicable cure period under any real estate lease, equipment lease, or financing instrument related to the franchised restaurant.

This requirement ensures that the franchisee is in good standing with Churchs Chicken and its related entities at the time of the transfer. Any existing defaults, if not properly addressed within the given cure period, could impede the transfer process. This protects the integrity of the Churchs Chicken brand and ensures that new ownership does not inherit unresolved issues.

Furthermore, Cajun reserves the right to require a reasonable sum of money to be placed in escrow to ensure all obligations are met. This escrow serves as a safeguard, ensuring that any outstanding financial or contractual obligations are satisfied before the transfer is finalized. This condition provides an additional layer of security for Churchs Chicken, ensuring a smooth transition and protecting its interests during the transfer of ownership.