What must a Churchs Chicken franchisee do if there is any change in the Continuity Group or their ownership interests?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- **E.
Continuity Group.** Schedule 2 lists those persons and/or entities that Cajun and Franchisee have designated as Franchisee's "Continuity Group." In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Franchisee shall execute addenda to Schedule 2 to reflect the change.
The Continuity Group shall at all times own at least 51% of the voting securities of Franchisee (or if Franchisee is a partnership, the Continuity Group shall at all times have at least a 51% interest in the operating profits and losses and at least a 51% ownership interest in Franchisee).
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a franchisee must execute addenda to Schedule 2 to reflect any changes in the Continuity Group or in the ownership interests of any member of the Continuity Group. The Continuity Group consists of persons and/or entities designated by Cajun and the franchisee.
This requirement ensures that the information contained in Schedule 2 remains true, accurate, and complete at all times. The Continuity Group must maintain at least 51% ownership of the voting securities of the franchisee. If the franchisee is a partnership, the Continuity Group must have at least a 51% interest in the operating profits and losses and at least a 51% ownership interest in the franchisee.
For a prospective Churchs Chicken franchisee, this means that any changes to the individuals or entities comprising the Continuity Group, or their respective ownership percentages, must be formally documented and reported to Churchs Chicken. This is to ensure that the franchisor maintains an accurate record of the franchisee's ownership structure and that the Continuity Group retains the controlling interest in the franchise, as defined in the franchise agreement.