What is the reduced royalty fee for Churchs Chicken franchisees participating in the Platinum Incentive Plan?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ntive program (the "Platinum Incentive Plan") for franchised Church's Texas Chicken restaurants ("Franchised Restaurants") that are developed pursuant to a Church's Texas Chicken Development Agreement that provides for the development of a minimum of five Franchised Restaurants within 5 years (the "Development Agreement").
Cajun and Developer are entering into this Addendum to modify the Development Agreement and to provide for Developer's receipt of the development incentives offered by Cajun pursuant to the Platinum Incentive Plan.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and obligations set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:
1. Platinum Incentive Plan Requirements.
- A. In order to be eligible for the Platinum Incentive Plan, Developer must open its first Franchised Restaurant no later than one year following the date of the Development Agreement (the "First Restaurant Deadline"). If Developer fails to open its first Franchised Restaurant by the First Restaurant Deadline, Developershall not be entitled to receive any benefits under the Platinum Incentive Plan.
- B. If the first Franchised Restaurant is developed in accordance with Section 1.A., the Platinum Incentive Plan benefits set forth in this Addendum shall apply to the second through fifth Franchised Restaurants that Developer opens in full compliance with the Development Schedule and the Development Agreement (each an "Eligible Restaurant"); provided that each Franchised Restaurant is opened by Developer by no later than one year after the opening date of the immediately prior Franchised Restaurant.
2. Development Incentives.
A. For each Eligible Restaurant that Developer develops and opens in accordance with the terms of the Development Schedule and th
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, the Platinum Incentive Plan offers reduced royalty fees for franchisees who meet specific development criteria. The royalty fee structure varies depending on the year after the restaurant opens.
For restaurants developed under the Platinum Incentive Plan, the royalty fee is 0% for the first year after opening. Subsequently, the royalty fee increases to 2% in the second year, 3% in the third year, and 4% in the fourth year. By the fifth year and thereafter, the royalty fee returns to the standard 5%.
This incentive is designed to encourage new development by reducing the financial burden on franchisees in the initial years of operation. To qualify for these reduced royalty fees, franchisees must adhere to the development schedule outlined in their Development Agreement and meet specific deadlines for opening new restaurants. This can significantly improve a franchisee's profitability in the early stages, but it's crucial to meet all requirements to maintain eligibility for the reduced rates.