Does the Churchs Chicken Guaranty Agreement extend to the successors of the Sublessor?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the Sublessee must adhere to the terms and conditions outlined in the Sublease agreement, franchise agreement, development agreement, asset purchase agreement, promissory note, and any guaranty. These agreements collectively, along with any others the Sublessee enters into, are referred to as "the Agreements".
The Sublessee's obligations extend not only to their own actions but also to those of their Affiliates, predecessors, or successors. Similarly, the Sublessor's obligations apply to their Affiliates, predecessors, or successors. This means that any party that takes over the Sublessor's role is also bound by the terms of the Agreements, including any guaranty.
Furthermore, any default by the Sublessee in any of these Agreements constitutes a default under the Sublease. This creates a cross-default provision, linking all the Agreements together. If the requirements in the franchise, development, or other agreements are more stringent than those in the Sublease, the more demanding requirements will take precedence.