How does the Development Agreement mentioned in Item 5 relate to the franchisee's obligations for pre-opening purchases/leases outlined in Item 9 for Churchs Chicken?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| OBLIGATION | SECTION(S) IN AGREEMENT(S) | DISCLOSURE DOCUMENT ITEM |
|---|---|---|
| a. Site Selection and Acquisition/Lease | § 5 of Development Agreement | Item 11 |
| b. Pre-Opening Purchases/Leases | § 6 of Development Agreement | Items 5, 7 and 8 |
| c. Site Development and Other Pre- | § 8 of Franchise Agreement | Items 7, 8 and |
| Opening Requirements | §§ 5 and 7 of Development Agreement | 11 |
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, referencing specific sections within the Development Agreement. Specifically, the franchisee's obligations for pre-opening purchases and leases are detailed in Section 6 of the Development Agreement, as indicated in Item 9. This signifies that the Development Agreement legally binds the franchisee to fulfill these pre-opening financial commitments.
The Development Agreement grants the developer the right to develop franchised restaurants within a specific geographic area during the development term. However, this agreement itself is not a franchise agreement and does not grant the developer the right to operate a Churchs Chicken restaurant until a separate Franchise Agreement is in place. The Development Agreement specifies the number of restaurants the developer must open and operate, along with the dates by which they must be operational, according to the Development Schedule.
Prospective Churchs Chicken franchisees should carefully review both the Development Agreement and the Franchise Agreement to fully understand their obligations. The Development Agreement sets the stage for expansion, while the Franchise Agreement governs the day-to-day operations of each restaurant. Understanding the interplay between these two agreements is crucial for successful franchise development with Churchs Chicken.