What defaults would disqualify a Churchs Chicken franchisee from renewing their franchise agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) In order for Franchisee to be eligible to renew the Franchise for the Renewal Term, Franchisee must meet all of the following conditions prior to and at the end of the Initial Term:
(a) Franchisee shall not be in default under this Agreement or any other agreements between Franchisee and Cajun or its affiliates and, for the 12 months prior to the date of Franchisee's notice and the 12 months prior to the expiration of the Initial Term, Franchisee shall not have been in default beyond the applicable cure period under this Agreement or any other agreements between Franchisee and Cajun or its affiliates throughout the Initial Term; Franchisee shall not be in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; and Franchisee shall not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant.
(b) Franchisee shall, at its expense, make the capital expenditures required to renovate and modernize the Franchised Restaurant to conform to the interior and exterior designs, décor, color schemes, furnishings and equipment and presentation of the Proprietary Marks consistent with the image of the System for new Church's Restaurants at the time Franchisee provides Cajun the renewal notice, including such structural changes, remodeling, redecoration and modifications to existing improvements as may be necessary to do so.
(c) Franchisee and its employees at the Franchised Restaurant shall be in compliance with Cajun's then-current training requirements, including all continuing education certificate requirements.
(d) Franchisee must have the right to remain in possession of the Franchised Location, or other premises acceptable to Cajun, for the Renewal Term and all monetary obligations owed to Franchisee's landlord, if any, or mortgagor, if any, must be current.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, several conditions must be met to be eligible for franchise renewal. A franchisee will not be eligible for renewal if they are in default of the franchise agreement or any other agreements with Cajun Global LLC (Churchs Chicken) or its affiliates. This includes any defaults that have not been cured within the applicable cure period, both in the 12 months prior to the renewal notice and in the 12 months before the initial term expires.
In addition to being in good standing with Churchs Chicken, the franchisee must also not be in default beyond any applicable cure periods related to real estate leases, equipment leases, financing instruments for the restaurant, or with any vendors or suppliers. This indicates that maintaining strong financial health and meeting obligations to landlords, equipment lessors, lenders, and suppliers is critical for renewal eligibility.
Furthermore, to renew their Churchs Chicken franchise, franchisees must invest in modernizing the restaurant to meet the current image standards of new Churchs restaurants. This includes interior and exterior design, décor, color schemes, furnishings, equipment, and the presentation of proprietary marks. Franchisees and their employees must also comply with Churchs Chicken's then-current training requirements, including any continuing education certifications. Finally, the franchisee must have the right to remain in possession of the franchised location for the renewal term, and all monetary obligations to their landlord or mortgagor must be current.
In summary, Churchs Chicken franchisees need to maintain compliance with all agreements, keep financial obligations current, invest in restaurant modernization, adhere to training requirements, and secure their location to qualify for renewal. Failure to meet these conditions can result in non-renewal of the franchise agreement.