If the Churchs Chicken franchisee is an individual or partnership of individuals, are they personally liable for the franchise agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Franchisee is an individual, or a partnership comprised solely of individuals, Franchisee makes the following additional representations and warranties: (a) each individual has executed this Agreement; (b) each individual shall be jointly and severally bound by, and personally liable for, the timely and complete performance and any breach of each and every provision of this Agreement; and (c) notwithstanding any Transfer for convenience of ownership pursuant to Section 15.F., each individual shall continue to be jointly and severally bound by, and personally liable for, the timely and complete performance and any breach of each and every provision of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, if the franchisee is an individual or a partnership consisting solely of individuals, each individual involved is personally liable for the franchise agreement. Specifically, each individual must execute the agreement and is jointly and severally bound by all its provisions. This means that each individual is responsible for the entire performance of the agreement and any breaches.
This personal liability extends throughout the term of the agreement, regardless of any ownership transfers made for convenience. Even if ownership changes occur, each original individual remains fully liable for the agreement's performance and any breaches that may occur. This provision ensures that Churchs Chicken has recourse to the personal assets of the individuals involved, providing a higher level of security for the franchisor.
This requirement is a fairly standard practice in franchising, particularly for smaller franchisees. Franchisors often seek personal guarantees to ensure commitment and financial responsibility. Prospective Churchs Chicken franchisees should carefully consider the implications of this personal liability and ensure they fully understand their obligations under the franchise agreement before signing.