Following the transfer, expiration, or earlier termination of the Churchs Chicken franchise agreement, what is the radius around the Franchised Location within which a franchisee is restricted from having an ownership interest in a competing fried 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 having an ownership interest in a competing fried chicken restaurant within a specific radius after the transfer, expiration, or termination of the franchise agreement. Specifically, for a period of 2 years, the franchisee cannot have an ownership interest in any restaurant business (other than a Church's Restaurant) that specializes in the sale of fried chicken. This restriction applies if the competing restaurant is located at or within a 5-mile radius of the former Franchised Location.
This restriction also extends to any Churchs Chicken restaurant that is then in existence or under development, meaning a franchisee is also prohibited from owning a competing fried chicken restaurant within a 5-mile radius of any existing or planned Churchs Chicken location. This provision aims to protect Churchs Chicken's market share and prevent former franchisees from directly competing with existing or future Churchs Chicken restaurants.
This non-compete clause is a standard practice in franchising to protect the brand and other franchisees. However, the franchisor, Cajun, has the right to reduce the extent of this covenant at its discretion, effective immediately upon the franchisee's receipt of notice. This modification would then be binding on the franchisee. Prospective franchisees should carefully consider the implications of this non-compete agreement and how it might affect their future business opportunities should they decide to leave the Churchs Chicken system.