What level of control must the operator have over the day-to-day activities of a Churchs Chicken restaurant?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Operating Principal.** Franchisee shall designate and retain an individual to serve as the "Operating Principal." The Operating Principal as of the date of this Agreement is identified in Schedule 2.
Unless waived in writing by Cajun, the Operating Principal shall meet all of the following qualifications:
(1) The Operating Principal, at all times, shall have at least a 10% equity ownership interest in Franchisee (unless Franchisee is a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity).
(2) The Operating Principal, at all times, shall be a member of the Continuity Group and, at a minimum, have full control over the day-to-day activities, including operations, of the Franchised Restaurant and those other restaurants (that are franchised by Cajun or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant, including control over the standards of operation and financial performance.
(3) The Operating Principal shall devote full-time and best efforts to supervising the operation of the Franchised Restaurant and those other restaurants (that are franchised by Cajun or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility.
(4) The Operating Principal shall maintain his or her primary residence within a reasonable driving distance of at least one of Franchisee's franchised Church's Restaurants.
(5) The Operating Principal shall successfully complete the NFOP (if it has not previously done so) and the MIT Program and any additional training required by Cajun.
(6) Cajun shall have approved the Operating Principal and not have later withdrawn that approval.
(7) If the Operating Principal no longer qualifies as such, Franchisee shall designate another qualified person to serve as Operating Principal within 30 days after the date the prior Operating Principal ceases to be qualified.
Franchisee's designee to become the Operating Principal must successfully complete the MIT Program and the NFOP.
Following Cajun's approval of a new Operating Principal, that person shall execute the attached form of Guaranty unless waived by Cajun in its sole discretion.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 49–50)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the franchisee must designate an 'Operating Principal' who has full control over the day-to-day activities of the franchised restaurant. This control extends to operations, standards of operation, and financial performance. The Operating Principal must also oversee any other Churchs Chicken restaurants the franchisee operates within the same geographic area.
This requirement ensures that a qualified individual is actively managing the restaurant and adhering to Churchs Chicken's standards. The Operating Principal must have at least a 10% equity ownership in the franchise, unless the franchisee is a publicly-held entity. This equity stake incentivizes the Operating Principal to focus on the restaurant's success.
Furthermore, the Operating Principal must devote their full-time efforts to supervising the restaurant's operations and cannot engage in other business activities that demand substantial management responsibility. They must also live within a reasonable driving distance of at least one of the franchisee's Churchs Chicken restaurants. This ensures they are readily available to address any issues that may arise. The Operating Principal must also complete the NFOP and MIT Program, as well as any additional training required by Churchs Chicken, and be approved by Churchs Chicken.