Does Churchs Chicken require franchisees to buy, lease, or sublease the premises for their Restaurant?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Development Agreement, you must obtain the right to occupy the premises at which you will operate each Restaurant. We have the right to review and approve these premises. You will generally have the option to buy, lease, or sublease the premises, depending on market conditions. If you lease or
sublease the premises, we have the right to review and approve the lease or sublease. We may require the lease or sublease to contain the following terms, among others, before we will give our approval: (1) if you default under the lease/sublease, orstop operating the Restaurant for any reason, we have the right to assume your rights and obligations under the lease/sublease; (2) if you default under the lease/sublease, we must receive a copy of any notice of the default; and (3) if you default under your lease/sublease or stop operating the Restaurant, we may modify the premises as necessary to enforce the covenants against competition and the other post-termination obligations under the Franchise Agreement that are noted in Item 17 below. You must use our form of Addendum to Lease Agreement attached as Exhibit R.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 31–34)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, franchisees must secure the rights to occupy the premises for their Restaurant. However, Churchs Chicken generally provides franchisees with the option to either buy, lease, or sublease the premises, and this decision often depends on the prevailing market conditions. Churchs Chicken retains the right to review and approve any premises selected by the franchisee. If the franchisee chooses to lease or sublease the premises, Churchs Chicken maintains the right to review and approve the lease or sublease agreement.
Churchs Chicken may require specific terms to be included in the lease or sublease agreement to protect their interests. These terms may include the right for Churchs Chicken to assume the franchisee's rights and obligations under the lease or sublease if the franchisee defaults or ceases operations. Churchs Chicken may also require notification of any default under the lease or sublease. Additionally, Churchs Chicken may reserve the right to modify the premises if the franchisee defaults or stops operating the Restaurant, in order to enforce covenants against competition and other post-termination obligations outlined in Item 17 of the Franchise Agreement. Franchisees are required to use Churchs Chicken's standard Addendum to Lease Agreement, which is included as Exhibit R in the FDD.
This requirement ensures that Churchs Chicken has some control over the location and operation of its franchises, even if the franchisee does not own the property outright. By retaining the right to approve the premises and the lease terms, Churchs Chicken can protect its brand and ensure that the location is suitable for a Churchs Chicken Restaurant. The stipulations regarding default and cessation of operations provide Churchs Chicken with a safety net, allowing them to maintain control over the location and prevent potential damage to the brand's reputation. The use of a standard addendum ensures consistency and protects the franchisor's interests across all franchise locations.