After termination or expiration of the Development Agreement, does the developer retain the right to operate Churchs Chicken restaurants that were open and operating under a Franchise Agreement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Upon termination or expiration of this Agreement:
- (1) Developer shall have no further right to develop or open Franchised Restaurants in the Development Area.
Termination or expiration of this Agreement shall not affect Developer's right to continue to operate Franchised Restaurantsthat were open and operating pursuant to a Franchise Agreement as of the date this Agreement terminated or expired.
(2) The rights granted Developer in the Development Area shall terminate and Cajun shall have the right to operate or license others to operate restaurants identified in whole or in part by the names and marks "Church's", "Church's Chicken" and "Church's Texas Chicken" anywhere in the Development Area.
(3) Developer promptly shall return to Cajun the Manual, any copies of the Manual and all other materials and information furnished by Cajun or its affiliates, except materials and information furnished with respect to a Franchised Restaurant which is open and operating pursuant to an effective franchise agreement.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the termination or expiration of the Development Agreement does not affect the developer's right to continue operating Churchs Chicken restaurants that were open and operating under a Franchise Agreement as of the termination or expiration date. However, the developer loses the right to develop or open any further franchised restaurants in the Development Area.
Specifically, upon termination or expiration, Churchs Chicken has the right to operate or license others to operate restaurants using the Church's trademarks within the Development Area. The developer must also return the operations manual and other materials provided by Churchs Chicken, except those materials related to restaurants operating under an effective franchise agreement.
This means that while a developer can continue to profit from existing Churchs Chicken locations after the Development Agreement ends, they cannot expand further in the designated area and must relinquish proprietary information, except for the restaurants they continue to operate. This ensures a smooth transition and protects Churchs Chicken's interests in the Development Area.