Following the transfer, expiration, or earlier termination of the Churchs Chicken franchise agreement, for how long is a franchisee prohibited from having an ownership interest in a restaurant business specializing in fried chicken within a 5-mile radius of the former franchised location or any existing or under-development Churchs Chicken restaurant?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) Franchisee further covenants that following the transfer, expiration or earlier termination of this Agreement, regardless of the cause for termination, Franchisee shall not, either directly or indirectly, for itself or through, on behalf of, or in conjunction with any person or entity:
- (a) for a period of 2 years, have an ownership interest in any restaurant business (other than a Church's Restaurant) that specializes in the sale of fried chicken and that is (i) located at or within a 5-mile radius of the Franchised Location, or (ii) located within a 5-mile radius of any Church's Restaurant that is then in existence or under development.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a franchisee is restricted from holding an ownership stake in a fried chicken restaurant (excluding another Churchs Chicken) for a period of two years after the transfer, expiration, or termination of their franchise agreement. This restriction applies regardless of the reason for termination.
Specifically, this non-compete clause prevents the franchisee from owning or operating a competing fried chicken restaurant within a 5-mile radius of either their former Churchs Chicken location or any other existing or under-development Churchs Chicken restaurant. This measure is in place to protect Churchs Chicken's market share and brand recognition by preventing former franchisees from directly competing in close proximity.
This restriction does not apply to any existing restaurant or foodservice operations the franchisee may have that are identified in Schedule 1 of the franchise agreement, nor does it apply to other restaurants operated by the franchisee that are also franchised by Cajun or its affiliates. Furthermore, Churchs Chicken retains the right to reduce the extent of this covenant at its discretion, effective immediately upon notice to the franchisee.