Is the Churchs Chicken development fee refundable?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
chisee shall execute the new franchise agreement or renewal agreement for the Renewal Term, as applicable, and return the signed agreement to Cajun, along with a renewal fee in the amount equal to 50% of Cajun's then-current initial franchise fee, prior to the expiration of the Initial Term. If Franchisee fails to do so, Cajun will deem such failure an election by Franchisee not to renew the Franchise and shall result in termination of the Franchise granted by this Agreement at the expiration of the Initial Term.
3. FEES
- A. Initial Franchise Fee. Simultaneously with Franchisee's execution of this Agreement, Franchisee shall pay to Cajun an initial franchise fee ("Initial Franchise Fee") in the amount specified in Schedule 1. The Initial Franchise Fee shall be in addition to any development fees paid by Franchisee to Cajun pursuant to a Church's Texas Chicken Development Agreement. Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Cajun when paid and is not refundable.
- **B.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the initial franchise fee is generally not refundable. Specifically, the initial franchise fee is considered fully earned by Cajun (the franchisor) upon payment. This non-refundable fee applies both to single-unit franchise agreements and to development agreements where a franchisee commits to opening multiple Churchs Chicken restaurants.
For a single-unit franchise, the initial franchise fee is paid when the Franchise Agreement is executed. Similarly, for each restaurant to be developed under a Development Agreement, an initial franchise fee is due upon execution of the individual Franchise Agreement for that restaurant. This fee is in addition to any separate development fees that may be required under the Development Agreement.
This policy of non-refundability is a fairly standard practice in the franchise industry, as the franchisor incurs costs from the outset in evaluating the franchisee, providing initial training and support, and reserving the territory. Prospective Churchs Chicken franchisees should therefore be prepared to lose this fee if they later decide not to proceed with opening a restaurant, regardless of the reason.