In the event of condemnation of a Churchs Chicken location, who seeks damages before the condemning body?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Condemnation Damages. In the event of the taking or conveyance of the whole or any part of the Premises by reason of condemnation, eminent domain, appropriation, annexation, or taking
or sale in lieu thereof, by any public or quasi-public body (the "Condemnation"), Fee Owner, Sublessor and Sublessee shall represent themselves independently in seeking damages before the condemning body. Neither Fee Owner nor Sublessor shall agree to any settlement in lieu of Condemnation with the condemning authority without Sublessee's consent. If a party to this Sublease receives notice of any proposed or pending Condemnation affecting the Premises, such party shall promptly give notice to the other party. Sublessor or Fee Owner shall be entitled to all such awards attributable to the value of the real estate and improvements thereon. Sublessee shall be entitled to all such awards attributable to the value of its lost remaining leasehold interest, and all compensation paid specifically for business damages and any special damages suffered by it as a result of said Condemnation. Neither Sublessor nor Fee Owner shall make a claim in such proceedings for any of the following: (i) a sum attributable to Sublessee's leasehold improvements or alterations made to the Premises by Sublessee in accordance with this Sublease, which improvements or alterations Sublessee has the right to remove from the Premises upon the termination of the Sublease pursuant to the provisions of this Sublease, but elects not to remove, (ii) any portion of the award attributable to Sublessee's furniture, trade fixtures, and equipment installed in the Premises in accordance with this Sublease which are to remain in the Premises as a result of such taking, or (iii) loss due to removing Sublessee's merchandise, furniture, trade fixtures, and equipment or for damage to Sublessee's business, moving expenses, and/or loss of business.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, in the event of condemnation, eminent domain, or similar taking of the premises, both the Fee Owner/Sublessor and the Sublessee (franchisee) will represent themselves independently in seeking damages from the condemning body. This means that Churchs Chicken franchisees have the right to independently pursue compensation for losses related to the condemnation of their restaurant location.
Churchs Chicken requires that neither the Fee Owner nor Sublessor can agree to any settlement with the condemning authority without the franchisee's consent. If any party receives notice of a pending condemnation, they must promptly notify the other party. This ensures transparency and protects the franchisee's interests during the condemnation process.
The franchisor, Fee Owner or Sublessor, is entitled to awards related to the real estate and improvements. The franchisee, as Sublessee, is entitled to awards for the value of their lost leasehold interest, business damages, and any special damages resulting from the condemnation. The Fee Owner or Sublessor cannot claim compensation for the franchisee's leasehold improvements, furniture, trade fixtures, equipment, or losses related to the franchisee's business operations.
This arrangement ensures that each party receives appropriate compensation for their respective losses in the event of a condemnation. It is structured to protect the franchisee's investment in their business and ensure they are compensated for losses directly related to their operations, while the Fee Owner/Sublessor is compensated for the real property.