Does the Churchs Chicken franchise agreement prohibit franchisees from joining an association of franchisees?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
To resolve an investigation by the Washington Attorney General and without admitting any liability, the franchisor has entered into an Assurance of Discontinuance ("AOD") with the State of Washington, where the franchisor affirmed that it already removed from its form franchise agreement a provision which restricted a franchisee from soliciting and/or hiring the employees of other franchisees, which the Attorney General alleges violated Washington state and federal antitrust and unfair practices laws. The franchisor has agreed, as part of the AOD, to not enforce any such provisions in any existing franchise agreement, to not include any such provisions in future franchise agreements, to request that its Washington franchisees amend their existing franchise agreements to remove such provisions, and to notify its franchisees about the entry of the AOD. In addition, the State of Washington did not assess any fines or other monetary penalties against the franchisor.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 50–55)
What This Means (2025 FDD)
The 2025 Churchs Chicken Franchise Disclosure Document does not explicitly state whether franchisees are prohibited from joining an association of franchisees. However, the document includes an Assurance of Discontinuance (AOD) with the State of Washington, where Churchs Chicken affirmed that it removed a provision from its franchise agreement that restricted franchisees from soliciting or hiring employees of other franchisees. This suggests that Churchs Chicken has taken steps to avoid restrictions that could be seen as anti-competitive.
While the AOD addresses a specific restriction related to employee solicitation, it does not directly address the formation or participation in franchisee associations. The presence of this AOD indicates a willingness by Churchs Chicken to modify its franchise agreements in response to regulatory concerns.
Prospective franchisees should carefully review the franchise agreement and any addenda for clauses that could potentially limit their ability to associate with other franchisees. It would be prudent to directly ask the franchisor about their stance on franchisee associations and whether there are any policies or restrictions in place that could affect a franchisee's ability to join or form such an association. Consulting with a franchise attorney can also help in understanding the legal implications of any such clauses.