What is a Churchs Chicken franchisee prohibited from doing regarding the Master Lease and Sublease?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Sublessee covenants and agrees to refrain from violating or breaching any of the terms, covenants or conditions of the Master Lease or this Sublease.
Except for the surrender, turn over and holdover rents provisions, to the extent of any conflict between the terms of this Sublease and the Master Lease, the terms of this Sublease shall control.
If the Master Lease is terminated for any reason whatsoever, this Sublease shall automatically terminate at such time.
Other Agreements.
Sublessee agrees to comply with all of the terms and conditions of any franchise agreement, development agreement, asset purchase agreement, promissory note, this Sublease and any guaranty, or other agreement entered into by Sublessee (collectively, the "Agreements"), any of its Affiliates (for the purposes of this Sublease, "Affiliate" shall mean any individual, group, association, limited or general partnership, corporation or other business entity which directly or indirectly controls the Sublessee, is controlled by, or is under common control with the Sublessee, or which directly or indirectly owns, controls, or holds power to vote ten percent (10%) or more of the outstanding voting securities of Sublessee, or which has in common one or more partners, officers, directors, trustees, branch managers, or other persons occupying similar status or performing similar functions), predecessors, or successors and Sublessor or any of its Affiliates, predecessors, or successors.
Any default by Sublessee of any of the Agreements listed in this Section 4 above shall, at the option of Sublessor be and constitute a default under this Sublease, such that the Agreements listed in this Section 4 above and this Sublease are cross-defaulted.
To the extent that any insurance requirements, record or bookkeeping requirements, or any other requirements in the above-described franchise, development, or other agreements require more from the Sublessee than the respective provisions of this Sublease, than the provisions of said franchise, development, and other agreements shall supersede and control.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a franchisee, as a Sublessee, is prohibited from violating or breaching any terms, covenants, or conditions outlined in the Master Lease or the Sublease agreement. This means the franchisee must adhere strictly to the obligations and restrictions detailed in both documents. If there is a conflict between the Sublease and Master Lease, the terms of the Sublease will take precedence, except for provisions regarding surrender, turnover, and holdover rents.
Furthermore, the Sublease automatically terminates if the Master Lease is terminated for any reason. This condition highlights the franchisee's dependence on the Master Lease's validity. The franchisee must also comply with all terms and conditions of any franchise agreement, development agreement, asset purchase agreement, promissory note, the Sublease, and any guaranty or other agreement they enter into. A default by the franchisee in any of these agreements constitutes a default under the Sublease, creating a cross-default scenario.
In cases where insurance, record-keeping, bookkeeping, or other requirements in the franchise, development, or other agreements are more stringent than those in the Sublease, the provisions of those franchise, development, and other agreements will supersede and control. This ensures that the franchisee meets the highest standards set forth in any of the related agreements, providing an additional layer of protection for Churchs Chicken and the Sublessor.