Does Churchs Chicken require approval of the designated Operating Principal?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Operating Principal.** Franchisee shall designate and retain an individual to serve as the "Operating Principal." The Operating Principal as of the date of this Agreement is identified in Schedule 2.
Unless waived in writing by Cajun, the Operating Principal shall meet all of the following qualifications:
(1) The Operating Principal, at all times, shall have at least a 10% equity ownership interest in Franchisee (unless Franchisee is a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity).
(2) The Operating Principal, at all times, shall be a member of the Continuity Group and, at a minimum, have full control over the day-to-day activities, including operations, of the Franchised Restaurant and those other restaurants (that are franchised by Cajun or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant, including control over the standards of operation and financial performance.
(3) The Operating Principal shall devote full-time and best efforts to supervising the operation of the Franchised Restaurant and those other restaurants (that are franchised by Cajun or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility.
(4) The Operating Principal shall maintain his or her primary residence within a reasonable driving distance of at least one of Franchisee's franchised Church's Restaurants.
(5) The Operating Principal shall successfully complete the NFOP (if it has not previously done so) and the MIT Program and any additional training required by Cajun.
(6) Cajun shall have approved the Operating Principal and not have later withdrawn that approval.
(7) If the Operating Principal no longer qualifies as such, Franchisee shall designate another qualified person to serve as Operating Principal within 30 days after the date the prior Operating Principal ceases to be qualified.
Franchisee's designee to become the Operating Principal must successfully complete the MIT Program and the NFOP.
Following Cajun's approval of a new Operating Principal, that person shall execute the attached form of Guaranty unless waived by Cajun in its sole discretion.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 49–50)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the franchisor, Cajun, must approve the franchisee's designated Operating Principal. This approval is a prerequisite for the individual to serve in that role. Furthermore, Cajun retains the right to withdraw this approval at a later date.
To qualify as an Operating Principal, the individual must meet several requirements, including holding at least a 10% equity ownership in the franchise (unless the franchisee is a publicly-held entity), being a member of the Continuity Group, and having full control over the day-to-day operations and financial performance of the franchised restaurant. The Operating Principal must also devote their full-time efforts to supervising the restaurant's operations and must live within a reasonable driving distance of at least one of the franchisee's Churchs Chicken restaurants.
The Operating Principal is also required to successfully complete the NFOP (New Franchise Orientation Program) and the MIT (Management Training) Program, along with any additional training that Cajun deems necessary. If an Operating Principal no longer meets the qualifications, the franchisee has 30 days to designate another qualified person to take on the role. This new designee must also complete the MIT Program and the NFOP. Following Cajun's approval, the new Operating Principal must execute a Guaranty, unless Cajun waives this requirement.
This requirement ensures that Churchs Chicken maintains a consistent standard of operation and management across all franchised locations. It allows Churchs Chicken to have oversight over who is managing the restaurant and to ensure that the Operating Principal is adequately trained and qualified. For a prospective franchisee, this means they need to identify an individual who meets these criteria and is willing to undergo the necessary training and approval process.