What fee does Churchs Chicken charge a Developer for each proposed offering of securities, and what does this fee cover?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
antors of Developer's obligations shall, at Cajun's request, execute a guaranty pursuant to which Developer and such guarantors shall remain liable for all obligations to Cajun incurred before the date of the Minority Transfer and for all obligations of the transferee to Cajun and its affiliates for a period of 1 year following such Minority Transfer.
- (8) Developer and all guarantors of Developer's obligations shall acknowledge and agree that they remain obligated under the applicable covenants contained in Section 14 of this Agreement as if this Agreement had been terminated on the date of the Transfer.
- C. Transfers for Convenience of Ownership. If Developer is an individual or a partnership and desires to Transfer this Agreement to a corporation (or limited liability company) formed for the convenience of ownership, Developer must notify Cajun and obtain Cajun's prior written approval. Cajun approval will be conditioned on the following: (1) the corporation (or limited liability company) must be newly organized; (2) prior to the Transfer, Cajun must receive a copy of the documents specified in Section
10.B. and the transferee shall comply with the remaining provisions of Section 10; and (3) Developer must own all voting securities of the corporati
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 required to pay a nonrefundable fee for each proposed offering of securities. This fee is set at $10,000, but may increase if Churchs Chicken's costs and expenses for reviewing the offering, including legal and accounting fees, exceed that amount.
This fee covers Churchs Chicken's expenses related to reviewing the proposed securities offering. This includes, but is not limited to, legal and accounting fees incurred by Churchs Chicken during the review process. Additionally, the Developer is responsible for delivering copies of the offering documents and a legal opinion from their counsel to Churchs Chicken, ensuring the documents properly use Churchs Chicken's proprietary marks and accurately describe the relationship between the Developer and Churchs Chicken.
The indemnification provisions outlined in Section 18 of the agreement also apply, meaning the Developer is responsible for covering any losses or expenses incurred by Churchs Chicken and its affiliates due to statements made by or on behalf of the Developer in connection with the securities offering. This protects Churchs Chicken from potential liabilities arising from the Developer's offering.
This requirement ensures that Churchs Chicken maintains control over how its brand and relationship are represented in financial offerings, and that the company is compensated for the costs associated with reviewing these complex transactions. For a prospective franchisee, this means understanding and budgeting for this potential expense if they plan to offer securities in their Churchs Chicken development business.