After the Churchs Chicken Development Agreement terminates, can Cajun operate or license others to operate Churchs Chicken restaurants at any location?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Upon termination or expiration of this Agreement:
(2) The rights granted Developer in the Development Area shall terminate and Cajun shall have the right to operate or license others to operate restaurants identified in whole or in part by the names and marks "Church's", "Church's Chicken" and "Church's Texas Chicken" anywhere in the Development Area.
(1) Developer shall have no further right to develop or open Franchised Restaurants in the Development Area.
Termination or expiration of this Agreement shall not affect Developer's right to continue to operate Franchised Restaurantsthat were open and operating pursuant to a Franchise Agreement as of the date this Agreement terminated or expired.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, upon termination or expiration of the Development Agreement, Cajun, the franchisor, has the right to operate or license others to operate Churchs Chicken restaurants anywhere in the Development Area. This means that once the agreement ends, the developer loses their exclusive rights to the territory, and Churchs Chicken can establish or authorize other franchisees within that area.
This clause has significant implications for a prospective developer. While the Development Agreement is active, the developer typically has exclusive rights to develop Churchs Chicken restaurants within a specified area. However, this exclusivity is not perpetual. Upon termination or expiration of the agreement, Churchs Chicken regains control over the territory and can then operate or allow others to operate Churchs Chicken restaurants there, potentially creating competition for any existing restaurants the developer may have established.
It is important to note that the termination or expiration of the Development Agreement does not affect the developer's right to continue operating Churchs Chicken restaurants that were open and operating under a Franchise Agreement as of the termination date. However, the developer cannot develop or open any new Churchs Chicken restaurants in the Development Area after the agreement ends. This distinction is crucial for developers to understand, as it clarifies their rights and limitations both during and after the Development Agreement period.