If a Churchs Chicken franchisee sells their Franchised Location after the franchise agreement terminates, what restrictive covenants must they include in the conveyance?

According to the 2025 Churchs Chicken Franchise Disclosure Document, if a franchisee sells, assigns, leases, or transfers their interest in the franchised location after the termination or expiration of the franchise agreement, they must include restrictive covenants in the terms of conveyance. These covenants are necessary to prevent the operation of a restaurant business that would violate Section 17.D.(3) at the franchised location for a period of one year.

Specifically, the restrictive covenants must ensure that the location is not used by an entity that the franchisee knows, or has reason to know, intends to operate a restaurant specializing in chicken sales or with a similar method of operation or trade dress to the Churchs Chicken system. The franchisee is also obligated to take all necessary steps to ensure these restrictive covenants become a matter of public record.

This requirement aims to protect Churchs Chicken's brand and market position by preventing direct competition at the former franchise location immediately following the transfer. It ensures a buffer period during which the brand can adjust to the change in ownership and prevent potential consumer confusion or market disruption. The franchisor, Cajun, retains the right to modify or reduce the extent of these covenants at its discretion, providing flexibility in enforcing these restrictions.