Does the Churchs Chicken Guaranty Agreement specify any monetary limits to the guarantee?
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)
Based on the 2025 Churchs Chicken Franchise Disclosure Document excerpts provided, there is no information regarding monetary limits specified within the Guaranty Agreement. The excerpts discuss various aspects of the franchise agreement, including exclusivity, obligations of the guarantor, and conditions related to development and operation.
Specifically, the excerpts detail the guarantor's obligations concerning trade secrets, confidential information, and actions that could be detrimental to the Proprietary Marks or the Churchs Chicken system. It also outlines restrictions on the guarantor's involvement in competing restaurant businesses during and after the franchise agreement term. However, none of the provided excerpts mention any monetary limitations related to the guarantee.
A prospective Churchs Chicken franchisee should review the complete Franchise Disclosure Document and specifically the Guaranty Agreement to understand if there are any monetary limits to the guarantee. If the FDD does not provide sufficient information, it is important to ask the franchisor directly about any financial caps or limitations associated with the guarantee to fully understand the potential financial exposure.