What is Churchs Chicken's obligation if I fail to comply with my Development Schedule?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to comply with your Development Schedule, we may terminate your Development Agreement. We will not refund your Development Fee if you fail to comply with the Development Schedule. We may, in our discretion, take action short of termination, including termination of some but not all of your development options, or, if you have an Exclusive Development Agreement, termination of your limited territorial exclusivity.
Source: Item 12 — TERRITORY (FDD pages 43–45)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, failure to comply with the Development Schedule outlined in the Development Agreement can lead to specific repercussions. Churchs Chicken has the right to terminate the Development Agreement if the franchisee fails to meet the agreed-upon schedule. Furthermore, Churchs Chicken will not refund the Development Fee should the franchisee not comply with the Development Schedule. However, Churchs Chicken may choose to take actions that are less severe than a full termination. These alternative actions could include terminating some, but not all, of the franchisee's development options. If the franchisee has an Exclusive Development Agreement, Churchs Chicken could terminate the limited territorial exclusivity granted in that agreement.
For a prospective Churchs Chicken franchisee, this means adhering to the Development Schedule is critical. The Development Agreement grants the right and obligation to develop an agreed-on number of Restaurants in the Development Area according to an agreed-on Development Schedule. Failing to meet these obligations can result in the loss of development rights and the Development Fee, which is not refundable. The potential loss of territorial exclusivity under an Exclusive Development Agreement further underscores the importance of meeting the Development Schedule.
It's important to note that Churchs Chicken retains discretion in how it responds to a franchisee's failure to comply with the Development Schedule. While termination is an option, Churchs Chicken may choose to take less drastic measures. This flexibility could provide some leeway for franchisees facing unforeseen challenges, but it does not guarantee leniency. Franchisees should communicate proactively with Churchs Chicken if they anticipate difficulties in meeting the Development Schedule to explore potential solutions and mitigate the risk of termination or other adverse actions.