factual

After termination or expiration of the Development Agreement, what rights does Cajun have regarding the operation of Churchs Chicken restaurants within the Development Area?

Churchs_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

efault is not by Developer, Developer is given notice of the default and 30 days to cure said default.

  • (11) There is a breach by Developer of any representation or warranty set forth in Section 25.G-H.
  • (12) The assets, property, or interests of Developer, any Continuity Group member or any guarantor are blocked under any law, ordinance, or regulation relating to terrorist activities, or Developer, any Continuity Group member or any guarantor otherwise violate any such law, ordinance, or regulation.
  • (13) Developer fails or refuses to comply with any other provision of this Agreement or any requirement of the System and does not correct the failure or refusal within 30 days (10 days for monetary defaults) after receiving notice of default. If Developer has received a notice of default pursuant to this Section 15.A.(13) within the previous 12 months, Cajun shall be entitled to send Developer a notice of termination upon Developer's next default under this Section 15.A.(13) within that 12-month period without providing Developer an opportunity to remedy that default.
  • B. Action Other Than Termination. If Cajun hasthe right to terminate this Agreement under Section 15.A., then Cajun may take any one or more of the following actions prior to or in lieu of termination:
  • (1) reduce the number of Franchised Restaurants which Developer is required to establish pursuant to Section 3.A. of this Agreement;
    • (2) reduce the size of the Development Area;
  • (3) withhold evaluation or acceptance of site proposal packages and refuse to permit the opening of any Franchised Restaurant then under construction or not otherwise not ready to commence operations, pending satisfactory cure of any such default;
    • (4) accelerate the Development Schedule; and
  • (5) pursue any other remedies available under this Agreement (including termination) or at law or in equity.

16. OBLIGATIONS ON TERMINATION OR EXPIRATION

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.
  • (4) Developer and all persons and entities subject to the covenants contained in Section 14 shall continue to abide by those covenants and shall not, directly or indirectly, take any action that violates those covenants.
  • (5) Developer immediately shall pay to Cajun and its affiliates all sums due and owing to Cajun or its affiliates pursuant to this Agreement.

Source: Item 23 — RECEIPT (FDD pages 68–406)

What This Means (2025 FDD)

According to Churchs Chicken's 2025 Franchise Disclosure Document, upon the termination or expiration of the Development Agreement, the developer's rights to develop or open franchised restaurants in the Development Area cease. However, the developer retains the right to continue operating any Churchs Chicken restaurants that were open and operating under a Franchise Agreement at the time of termination or expiration.

Cajun, which is Churchs Chicken, has the right to operate or license others to operate restaurants identified by the Churchs Chicken trademarks anywhere within the Development Area. The developer must also promptly return the Manual, any copies of the Manual, and all other materials and information furnished by Cajun, except those materials related to restaurants operating under an effective franchise agreement.

Furthermore, for a period of two years following the termination or expiration of the Development Agreement, the developer is restricted from having an ownership interest in any restaurant business (other than a Churchs Chicken restaurant) that specializes in the sale of fried chicken within the Development Area or within a 5-mile radius of any existing or developing Churchs Chicken restaurant. However, these restrictions do not apply to the developer's existing restaurant or foodservice operations, if any, which are identified in Schedule 2, nor do they apply to other restaurants operated by the developer that are franchised by Cajun or its affiliates. Cajun also retains the right to reduce the extent of any covenant in this section effective immediately upon the developer's receipt of notice.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.