What outstanding obligations related to the Franchised Restaurant must be satisfied for a Churchs Chicken franchise transfer to be approved?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a franchisee looking to transfer their franchise must first satisfy all outstanding obligations related to the Franchised Restaurant. This includes settling bills from suppliers, taxes, judgments, and any required governmental reports, returns, affidavits, or bonds. Alternatively, the franchisee can make adequate provisions for these obligations, as judged reasonable by Churchs Chicken.
Churchs Chicken retains the right to demand that a suitable sum of money be placed in escrow to guarantee that all obligations are fulfilled. This measure ensures that all financial and legal responsibilities tied to the restaurant are properly managed before the transfer is finalized.
This requirement protects Churchs Chicken from potential liabilities and ensures a smooth transition to the new franchisee. It is a fairly standard practice in franchising to ensure all debts and legal requirements are cleared before a transfer is approved.