After the Franchise Agreement is terminated, what is the geographic scope of the non-competition covenant for a Churchs Chicken franchisee?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| r. Non-Competition Covenants After the Franchise is Terminated or Expires | §17 | Post-term, non-competition covenants include a 2-year ban on owning any restaurant business that specializes in selling fried chicken within a 5-mile radius of your Restaurant or any Restaurant then in existence (which restriction does not apply to your existing Restaurants, if any, or to other restaurants you operate that are franchised by us or our affiliates). With respect to individual owners, the same covenant is contained in § 4 of the Guaranty Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 50–55)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, after the Franchise Agreement is terminated or expires, a franchisee is subject to a non-competition covenant. This covenant restricts the franchisee from owning any restaurant business that specializes in selling fried chicken for a period of 2 years. The geographic scope of this restriction includes a 5-mile radius of the franchisee's former Churchs Chicken restaurant or any other Churchs Chicken restaurant then in existence.
This restriction does not apply to any existing restaurants the franchisee may own at the time of termination, or to other restaurants the franchisee operates that are franchised by Churchs Chicken or its affiliates. This means a franchisee can continue operating other restaurant concepts they already own, or other Churchs Chicken franchises, without violating the non-compete agreement.
Individual owners are also subject to a similar covenant, as outlined in Section 4 of the Guaranty Agreement. This ensures that the owners themselves cannot circumvent the non-compete by opening a competing fried chicken restaurant under a different business entity. Prospective franchisees should carefully review Section 17 of the Franchise Agreement and Section 4 of the Guaranty Agreement to fully understand the terms and implications of the post-term non-competition covenants.