If the Franchised Location is leased, what are the indemnification responsibilities of Cajun and the franchisee regarding the lease for a Churchs Chicken franchise?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- I. If the Franchised Location is leased, Cajun agrees to use reasonable efforts to effect a termination of the existing lease for the Franchised Location.
If the lease for the Franchised Location is assigned to Cajun or Cajun subleases the Franchised Location from Franchisee, Cajun will indemnify and hold Franchisee harmless from any ongoing liability under the lease from the date Cajun assumes possession of the Franchised Location, and Franchisee will indemnify and hold Cajun harmless from any liability under the lease prior to and including that date.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, if the franchised location is leased, Cajun agrees to use reasonable efforts to terminate the existing lease. If the lease is assigned to Cajun or subleased from the franchisee, Cajun will indemnify and hold the franchisee harmless from any ongoing liability under the lease from the date Cajun assumes possession. Conversely, the franchisee will indemnify and hold Cajun harmless from any liability under the lease prior to and including that date.
This means that a Churchs Chicken franchisee is responsible for the lease obligations up to the point that Cajun takes possession of the property. After that, Cajun assumes responsibility. This division of responsibility protects both parties from liabilities incurred by the other.
This type of indemnification agreement is fairly standard in franchising when dealing with leased properties. It ensures a clear understanding of who is responsible for the lease at different times. A prospective franchisee should carefully review the lease agreement and understand their obligations before Cajun takes possession to avoid any potential disputes or liabilities.