After the franchise is terminated or expires, what are the post-term non-competition covenants for a Churchs Chicken franchisee, including the duration and radius of the ban?
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 is terminated or expires, franchisees are subject to a non-competition covenant. This covenant includes a 2-year ban on owning any restaurant business that specializes in selling fried chicken.
The geographic scope of this restriction extends within a 5-mile radius of the franchisee's former Churchs Chicken restaurant or any other Churchs Chicken restaurant in existence at the time of termination or expiration. This restriction aims to prevent former franchisees from directly competing with existing Churchs Chicken locations, thereby protecting the brand's market share and customer base.
It is important to note that this restriction does not apply to any existing restaurants the franchisee owns at the time of signing the agreement, nor does it apply to other restaurants the franchisee operates that are franchised by Churchs Chicken or its affiliates. This allows franchisees to continue operating other restaurant businesses they may have, provided they are not directly competitive fried chicken businesses within the specified radius. Individual owners are also subject to the same covenant, as outlined in § 4 of the Guaranty Agreement.