What form must Churchs Chicken franchisees use as an addendum to their lease agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Development Agreement, you must obtain the right to occupy the premises at which you will operate each Restaurant. We have the right to review and approve these premises. You will generally have the option to buy, lease, or sublease the premises, depending on market conditions. If you lease or
sublease the premises, we have the right to review and approve the lease or sublease. We may require the lease or sublease to contain the following terms, among others, before we will give our approval: (1) if you default under the lease/sublease, orstop operating the Restaurant for any reason, we have the right to assume your rights and obligations under the lease/sublease; (2) if you default under the lease/sublease, we must receive a copy of any notice of the default; and (3) if you default under your lease/sublease or stop operating the Restaurant, we may modify the premises as necessary to enforce the covenants against competition and the other post-termination obligations under the Franchise Agreement that are noted in Item 17 below. You must use our form of Addendum to Lease Agreement attached as Exhibit R.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 31–34)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, franchisees must use the form of Addendum to Lease Agreement attached as Exhibit R. Churchs Chicken has the right to review and approve the premises where the franchisee will operate their restaurant. Franchisees generally have the option to buy, lease, or sublease the premises, depending on market conditions. If the franchisee chooses to lease or sublease, Churchs Chicken has the right to review and approve the lease or sublease.
Churchs Chicken may require the lease or sublease to contain specific terms before giving approval. These terms include: if the franchisee defaults under the lease/sublease, or stops operating the Restaurant for any reason, Churchs Chicken has the right to assume the franchisee's rights and obligations under the lease/sublease. Also, if the franchisee defaults under the lease/sublease, Churchs Chicken must receive a copy of any notice of the default. Finally, if the franchisee defaults under their lease/sublease or stops operating the Restaurant, Churchs Chicken may modify the premises as necessary to enforce the covenants against competition and the other post-termination obligations under the Franchise Agreement.
This requirement ensures that Churchs Chicken maintains control over the restaurant locations and can protect its interests in case of franchisee default or termination. Prospective franchisees should carefully review Exhibit R and understand the implications of these terms before signing a lease or sublease agreement. It is common practice in franchising for the franchisor to have approval rights over the location and lease terms to protect the brand and ensure consistency across all locations.