What counterclaims did Churchs Chicken file against Royal Texas in the Georgia Action?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
as Federal Action currently remains stayed.
Royal Texas, LLC v. Cajun Global, LLC, Cajun Operating, LLC and High Bluff Capital Partners, LLC¸ Case No. 2022CV362893 (Fulton County, Georgia Superior Court) (the "Georgia Action"). On March 31, 2022, Royal Texas filed an action against us, our affiliate Cajun Operating, LLC, and our private equity ownership, High Bluff Capital Partners, LLC in Georgia (the "Georgia Action"). In the Georgia Action, Royal Texas asserted that we breached the parties' franchise agreements and the implied covenant of good faith and fair dealing by: (1) failing to offer Royal Texas renewal terms; (2) terminating the franchise agreements for allegedly pretextual reasons; and (3) allegedly failing to provide local marketing. Royal Texas also asserted claims for an accounting of Cajun Operating's Purchasing Group Fund, for business defamation, and for recovery of its attorneys' fees. The complaint did not make a demand for specific damages but alleges damages in excess of $50,000,000. We answered and filed counterclaims for breach of promissory note, statutory trademark infringement, statutory unfair competition, statutory
trademark or tradename infringement/unfair competition, common law unfair competition, civil theft, civil RICO, unjust enrichment, fraudulent inducement, fraudulent misrepresentation and c
Source: Item 3 — LITIGATION (FDD pages 14–16)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, in response to the Georgia Action filed by Royal Texas, Churchs Chicken filed counterclaims against Royal Texas for breach of promissory note, statutory trademark infringement, statutory unfair competition, trademark or tradename infringement/unfair competition, common law unfair competition, civil theft, civil RICO, unjust enrichment, fraudulent inducement, fraudulent misrepresentation and concealment, and negligent misrepresentation. The Georgia Action was initiated by Royal Texas, who alleged that Churchs Chicken breached their franchise agreements and the implied covenant of good faith and fair dealing. Royal Texas also claimed failure to provide local marketing, sought an accounting of Cajun Operating's Purchasing Group Fund, alleged business defamation, and sought recovery of attorneys' fees, with damages exceeding $50,000,000.
These counterclaims indicate the serious nature of the dispute between Churchs Chicken and Royal Texas. The breadth of the counterclaims, including allegations of trademark infringement, civil theft, and RICO violations, suggests that Churchs Chicken believed Royal Texas had engaged in significant misconduct. The reference to a breach of promissory note indicates a financial component to the dispute, while claims of fraudulent inducement and misrepresentation suggest issues with the initial agreement or ongoing representations made to Churchs Chicken.
For a prospective franchisee, this litigation highlights the potential risks involved in franchising, including the possibility of disputes leading to costly and complex legal battles. It also underscores the importance of adhering to the terms of the franchise agreement and maintaining ethical business practices to avoid potential counterclaims from the franchisor. The fact that the Georgia Action remains pending suggests that the dispute is ongoing and could have further implications for both parties. Franchisees should seek legal counsel to fully understand their rights and obligations under the franchise agreement and to assess the potential risks associated with the franchise relationship.