When is the initial franchise fee for a Churchs Chicken franchise fully earned by Cajun?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Initial Franchise Fee. Simultaneously with Franchisee's execution of this Agreement, Franchisee shall pay to Cajun an initial franchise fee ("Initial Franchise Fee") in the amount specified in Schedule 1. The Initial Franchise Fee shall be in addition to any development fees paid by Franchisee to Cajun pursuant to a Church's Texas Chicken Development Agreement. Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Cajun when paid and is not refundable.
- B. Royalty Fee. In addition to all other amounts to be paid by Franchisee to Cajun, Franchisee shall pay to Cajun a nonrefundable and continuing weekly royalty fee (the "Royalty Fee") in an amount equal to 5% of the Gross Sales (as defined below) of the Franchised Restaurant for the preceding week for the right to use the System and the Proprietary Marks at the Franchised Location. If any taxes, fees or assessments are imposed on Cajun by reason of its acting as franchisor or licensing the Proprietary Marks under this Agreement, Franchisee shall reimburse Cajun the amount of those taxes, fees or assessments within 30 days after receipt of an invoice from Cajun.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the initial franchise fee is considered fully earned by Cajun Global LLC (Cajun) upon payment by the franchisee. The document explicitly states that the initial franchise fee is not refundable. This policy applies both to single-unit franchise agreements and development agreements where multiple Churchs Chicken restaurants are planned.
For a prospective Churchs Chicken franchisee, this means that once the initial franchise fee is paid, it is non-refundable, regardless of whether the restaurant ever opens or if the agreement is terminated. This is a standard practice in franchising, as the fee compensates the franchisor for the initial costs and efforts in evaluating the franchisee, providing training, and granting the franchise rights. The franchisee should therefore conduct thorough due diligence before signing the agreement and paying the fee.
In the case of a Development Agreement, where a developer commits to opening multiple Churchs Chicken locations, the initial franchise fee is payable upon the execution of each individual Franchise Agreement for each restaurant. Similar to the single-unit franchise, this fee is also fully earned by Cajun upon payment and is non-refundable. However, a Development Schedule Extension Fee, not to exceed $5,000, may be credited toward the Initial Franchise Fee under certain conditions.