During the term of the Churchs Chicken Development Agreement, what is the non-competition covenant regarding owning a restaurant business that specializes in selling fried chicken?

According to Churchs Chicken's 2025 Franchise Disclosure Document, during the term of the Development Agreement, franchisees are subject to certain non-competition covenants. Specifically, franchisees are prohibited from owning any restaurant business that specializes in selling fried chicken.

However, this restriction does not apply to the franchisee's existing restaurants, if any, or to other restaurants they operate that are franchised by Churchs Chicken or its affiliates. This means a franchisee can continue to operate existing restaurants, even if they sell fried chicken, and can also operate other franchise concepts under the Churchs Chicken umbrella.

Individual owners are also subject to the same non-competition covenant, as outlined in Section 4 of the Guaranty Agreement. This ensures that the owners themselves are also bound by the restriction on owning competing fried chicken restaurants during the term of the Development Agreement. This type of in-term non-compete clause is common in franchising to protect the brand's market share and prevent franchisees from directly competing with the system.