After the franchise is terminated or expires, what are the non-competition restrictions for owning a restaurant that specializes in selling fried chicken within a certain radius of a Churchs Chicken restaurant?
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 Churchs Chicken's 2025 Franchise Disclosure Document, after the franchise agreement is terminated or expires, franchisees face certain non-competition restrictions. Specifically, there is a 2-year ban on owning any restaurant business that specializes in selling fried chicken. This restriction applies within a 5-mile radius of the franchisee's former Churchs Chicken restaurant or any other Churchs Chicken restaurant that is currently in existence.
This non-compete clause does not apply to any existing restaurants the franchisee owns at the time of termination or expiration, nor does it apply to other restaurants the franchisee operates that are franchised by Churchs Chicken or its affiliates. This means a franchisee could continue operating other restaurant concepts, even those under the Churchs Chicken umbrella, without violating the non-compete agreement.
This restriction is fairly standard in the franchise industry to protect the brand and market share of Churchs Chicken. Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they have plans to operate other restaurant businesses in the future. It is also important to note that the Guaranty Agreement contains a similar covenant for individual owners, reinforcing the non-competition obligations.