If a Churchs Chicken franchisee relocates their restaurant, what expenses can Cajun charge the franchisee?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Cajun hereby grants to Franchisee a license (the "Franchise") to continuously operate the Franchised Restaurant at the Franchised Location and to use the Proprietary Marks solely in the operation of the Franchised Restaurant. Franchisee shall not operate the Franchised Restaurant at any site other than the Franchised Location, and shall not relocate the Franchised Restaurant without Cajun's prior consent, which may be withheld by Cajun in its sole discretion and will be subject to the site acceptance process set forth in the Development Agreement. If Cajun approves a relocation of the Franchised Restaurant, it shall have the right to charge Franchisee for all reasonable expenses actually incurred in connection with consideration of the relocation request and Cajun may condition its approval upon the payment of a minimum royalty to Cajun during the period in which the Franchised Restaurant is not in operation. The minimum royalty will be calculated as the average weekly royalty that Franchisee owed to Cajun during the 52 weeks before the closure of the Restaurant (or any such lesser period if the Restaurant was not open 52 weeks) multiplied by the number of weeks or partial weeks that the Restaurant is not in operation.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a franchisee cannot relocate their restaurant without prior consent from Cajun. If Cajun approves the relocation of a Churchs Chicken restaurant, they have the right to charge the franchisee for all reasonable expenses actually incurred while considering the relocation request.
Cajun may also require the franchisee to pay a minimum royalty during the period in which the Churchs Chicken restaurant is not in operation. This minimum royalty is calculated by multiplying the average weekly royalty the franchisee owed to Cajun during the 52 weeks before the restaurant's closure (or any lesser period if the restaurant was not open for 52 weeks) by the number of weeks or partial weeks that the restaurant is not operating.
This means that a Churchs Chicken franchisee considering relocation needs to factor in not only the direct costs of moving but also potential royalty payments during the downtime. The franchisee should seek clarity from Cajun regarding what constitutes 'reasonable expenses' to avoid unexpected charges. The minimum royalty payment could be a substantial financial burden, especially if the relocation process is lengthy.