How long must a Churchs Chicken franchisee's personal, active participation in the development and operation of the Franchised Restaurant be curtailed for it to be considered a 'permanent disability'?

According to Churchs Chicken's 2025 Franchise Disclosure Document, a franchisee is considered to have a 'permanent disability' if their active participation in the development and operation of the franchised restaurant is curtailed for a continuous period of 6 months. This definition is important because it triggers certain provisions within the franchise agreement related to the transfer of ownership interests.

Specifically, the FDD states that ownership interests in the franchise can be transferred following the death or permanent disability of a person with an ownership interest. This transfer is typically to the parent, sibling, spouse, children, or a member of a Continuity Group. The transfer must be completed within six months from the date of death or permanent disability; failure to do so constitutes a breach of the agreement.

It's important to note that Churchs Chicken retains the discretion to approve or deny any proposed transfer of ownership. The company may consider factors such as whether the transfer is an attempt to circumvent a previously rejected transfer request, whether Churchs Chicken has received advance notice and copies of all proposed contracts, and whether the proposed transferee has demonstrated good character, business reputation, and credit rating. Additionally, all of the franchisee's financial obligations to Churchs Chicken must be satisfied before the transfer can be approved.

This clause protects Churchs Chicken by ensuring that transfers of ownership due to disability are handled promptly and that the new owners meet their standards. For a prospective franchisee, this means understanding the conditions under which ownership can be transferred and the importance of having a plan in place in case of death or disability.