What monetary obligations must a Churchs Chicken franchisee satisfy before a transfer can be approved?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Franchisee shall pay Cajun a nonrefundable Transfer fee in the amount of $10,000 in connection with Cajun's review of the Transfer application.
(2) All of Franchisee's accrued monetary obligations to Cajun and its affiliates (whether arising under this Agreement or otherwise) have been satisfied, and all of Franchisee's outstanding obligations related to the Franchised Restaurant (including, but not limited to, bills from suppliers, taxes, judgments and any required governmental reports, returns, affidavits or bonds) have been satisfied or, in the reasonable judgment of Cajun, adequately provided for.
Cajun reserves the right to require that a reasonable sum of money be placed in escrow to ensure that all of these obligations are satisfied.
- **F.
Transfers for Convenience of Ownership.** If Franchisee is an individual or a partnership and desires to Transfer this Agreement to a corporation (or limited liability company) formed for the convenience of ownership, the requirements of this Section 15 shall apply to such a Transfer; however, Franchisee will not be required to pay a Transfer fee.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a franchisee must meet certain monetary obligations before a transfer of the franchise can be approved. Specifically, all of the franchisee's accrued monetary obligations to Churchs Chicken and its affiliates must be satisfied. This includes obligations arising under the Franchise Agreement or otherwise.
In addition to obligations to the franchisor, the franchisee must also satisfy all outstanding obligations related to the franchised restaurant. These obligations include, but are not limited to, bills from suppliers, taxes, judgments, and any required governmental reports, returns, affidavits, or bonds. Churchs Chicken also reserves the right to require that a reasonable sum of money be placed in escrow to ensure that all of these obligations are satisfied before the transfer is finalized.
Furthermore, the franchisee must pay Churchs Chicken a nonrefundable transfer fee of $10,000 in connection with Churchs Chicken's review of the transfer application. However, the transfer fee is waived if the transfer is merely for the convenience of ownership, such as transferring the agreement to a corporation or limited liability company formed for ownership purposes.