After the expiration or termination of the Churchs Chicken Development Agreement, for how long is the developer restricted from having an ownership interest in a fried chicken restaurant?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(3) Developer further covenants that following the expiration or earlier termination of this Agreement, regardless of the cause for termination, Developer shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person or entity, for a period of two years, have an ownership interest in any restaurant business that specializes in the sale of fried chicken (other than a Church's Restaurant) and that is located (i) in the Development Area or (ii) within a 5-mile radius of the location of any other Church's Restaurant that is then in existence or under development; or
(4) The restrictions in Sections 14.C.(2)(d) and 14.C.(3)(a) shall not apply to Developer's existing restaurant or foodservice operations, if any, which are identified in Schedule 2, nor shall they apply to other restaurants operated by Developer that are franchised by Cajun or its affiliates.
If a court finds that any restriction in Section 14.C.is not enforceable, it is the intent of the parties that the court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Cajun.
If, at any time during the restrictive period following expiration or earlier termination of this Agreement, Developer fails to comply with its obligations under this Section, that period of noncompliance will not be credited toward Developer's completion of the restrictive period provided that Cajun takes action to enforce the obligations under this Section within the restrictive period.
- **D.
Modification.** Cajun shall have the right, in its sole discretion, to reduce the extent of any covenant in this Section effective immediately upon Developer's receipt of notice, and Developer shall be bound by the covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 21.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a developer is restricted from having an ownership interest in a fried chicken restaurant for a period of two years following the expiration or termination of the Development Agreement. This restriction applies regardless of the reason for termination.
Specifically, the developer cannot have an ownership interest in any restaurant business (other than a Churchs Chicken restaurant) that specializes in the sale of fried chicken. This restriction applies to restaurants located within the Development Area or within a 5-mile radius of any existing or developing Churchs Chicken restaurant.
However, these restrictions do not apply to the developer's existing restaurant or foodservice operations, if any, that are identified in Schedule 2, nor do they apply to other restaurants operated by the developer that are franchised by Cajun or its affiliates. Cajun, at its sole discretion, has the right to reduce the extent of any covenant in this section with immediate effect upon the developer's receipt of notice.