In the Churchs Chicken Guaranty Agreement, what is the role of the individual signing the agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Guarantor shall not, during the Initial Term, any Renewal Term, or for a period of two years after the expiration or termination of the Franchise Agreement (or with respect to trade secrets, during the Initial Term, any Renewal Term, or any time thereafter), 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 acts injurious 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 Initial Term and any Renewal 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.
(b) Following the expiration or earlier termination of the Agreement, regardless of the cause for termination, Guarantor shall not, either directly or indirectly, for Guarantor, or through, on behalf of, or in conjunction with any person or entity: for a period of two years, have an ownership interest in any restaurant business (other than a Church's Restaurant) that specializes in the sale of fried chicken and that is located or within a 5-mile radius of the Franchised Location or located within a 5-mile radius of the location of any Church's Restaurant that is then in existence.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, the guarantor agrees to certain covenants during the Initial Term, any Renewal Term, and for a period after the expiration or termination of the Franchise Agreement. These covenants primarily focus on protecting Churchs Chicken's trade secrets, confidential information, and proprietary marks. The guarantor is prohibited from disclosing any trade secrets or confidential information to unauthorized parties.
Specifically, the guarantor cannot perform any actions that could harm the Proprietary Marks or the Churchs Chicken system. During the term of the agreement, the guarantor is restricted from diverting business away from any restaurant franchised or operated by Churchs Chicken or its affiliates. They are also 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 agreement, the guarantor is restricted for two years from having an ownership interest in a fried chicken restaurant (other than Churchs Chicken) within a 5-mile radius of the Franchised Location or any existing Churchs Chicken restaurant. This ensures that the guarantor does not directly compete with Churchs Chicken using knowledge or experience gained during the franchise agreement.