For a Churchs Chicken franchise operating at a facility with a gasoline station, what is a 'Supply Contract'?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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- If Franchisee operates a gasoline station at the Facility pursuant to a contract with a third party, as identified in Appendix A ("Supplier"), for the supply and subsequent sale of petroleum products ("Supply Contract"), the following is added immediately prior to the period at end of the first sentence of Section 2.A. of the Franchise Agreement:
- , or upon the expiration or earlier termination of the Supply Contract if Franchisee fails to enter into a new contract for the supply and subsequent sale of petroleum products with Supplier or another third party.
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- The following sentence is added to the end of Section 3.D.:
Gross Sales shall also not include: (1) any revenue derived from any business operated by Franchisee at the Facility other than the Franchised Restaurant, or (2) beverages sold at the Facility in containers not bearing the Proprietary Marks (beverages sold in containers bearing the Proprietary Marks shall be included in Gross Sales).
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a 'Supply Contract' is defined within the context of a Churchs Chicken franchise operating at a facility that also includes a gasoline station. Specifically, if a franchisee operates a gasoline station at the facility under an agreement with a third-party supplier, the agreement between the franchisee and the third-party supplier for the supply and subsequent sale of petroleum products is termed the 'Supply Contract'.
This definition is important because Churchs Chicken requires franchisees who operate a gasoline station at the same facility to provide them with a copy of the Supply Contract upon request. Additionally, the expiration or termination of this Supply Contract can impact the terms of the Churchs Chicken franchise agreement. If the Supply Contract expires or is terminated early and the franchisee does not enter into a new supply contract, it can trigger certain clauses within the franchise agreement.
For a prospective Churchs Chicken franchisee, this means that if they plan to operate a Churchs Chicken restaurant in conjunction with a gasoline station, they must be prepared to share the details of their fuel supply agreement with Churchs Chicken. This requirement allows Churchs Chicken to understand the franchisee's overall business situation and ensure compliance with the franchise agreement, especially regarding the operation and potential impact of the gasoline station on the Churchs Chicken business.