Does the Churchs Chicken Guaranty Agreement outline any specific obligations of the Guarantor?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
protect the trade secrets and the confidentiality of the proprietary information and know-how comprising the System; (iv) all material or other information now or hereafter provided or disclosed to Guarantor regarding the System is disclosed in confidence; (v) Guarantor will not acquire any interest in the System; and (vi) Guarantor's use or duplication of the System or any part of the System in any other business would constitute an unfair method of competition, for which Cajun would be entitled to all legal and equitable remedies, including injunctive relief, without posting a bond.
(b) Guarantor shall not, during the Development Term or for a period of two years thereafter (or, with respect to trade secrets, at any time during or after the Development Term), communicate or disclose any trade secrets or confidential or proprietary information or know-how of the System to any unauthorized person or entity, or do or perform, directly or indirectly, any other actsinjurious or prejudicial to any of the Proprietary Marks or the System. Any and all information, knowledge, know how and techniques, including all drawings, materials, equipment, specifications, recipes, techniques and other data that Cajun or its affiliates designate as confidential shall be deemed confidential for purposes of this Guaranty.
4. Covenants.
(a) During the Development Term, Guarantor shall not, either directly or indirectly, for Guarantor, or through, on behalf of, or in conjunction with, any person or entity:
(i) divert or attempt to divert any business or customer, or potential business or customer, of any restaurant franchised or operated by Cajun or its affiliates to any competitor, by direct or indirect inducement or otherwise or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks or the System; or
(ii) have an ownership interest in any restaurant business (other than a Church's Restaurant) that specializes in the sale of fried chicken.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, the Guaranty Agreement outlines several obligations for the Guarantor. During the Development Term, the Guarantor cannot directly or indirectly divert business from any restaurant franchised or operated by Cajun or its affiliates to a competitor. Additionally, the Guarantor is prohibited from having an ownership interest in any restaurant business (other than a Churchs Chicken Restaurant) that specializes in the sale of fried chicken.
Following the expiration or termination of the Development Agreement, the Guarantor is restricted for two years from having an ownership interest in a fried chicken restaurant (excluding Churchs Chicken) that is located in the Development Area or within a 5-mile radius of any existing Churchs Chicken Restaurant. The Guarantor also cannot communicate or disclose any trade secrets or confidential information of the Churchs Chicken system to any unauthorized person or entity, or perform any acts injurious to the Proprietary Marks or the System during the Development Term and for two years thereafter (or indefinitely for trade secrets).
The Guarantor acknowledges that all information provided regarding the Churchs Chicken System is confidential and that they will not acquire any interest in the System. The Guarantor's use or duplication of the System in any other business would be considered an unfair method of competition, entitling Cajun to legal and equitable remedies, including injunctive relief, without needing to post a bond. Cajun has the right to reduce the extent of any covenant in this section with immediate effect upon the Guarantor's receipt of notice.