Why was the Texas State Action involving Churchs Chicken removed to Texas federal court?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Cajun Global, LLC, Cajun Operating Company, Cajun Realty, LLC, and Cajun Funding Corp. v. Royal Texas, LLC, Case No. 2022-17350 (Harris County, Texas District Court) (the "Texas State Action"). On March 21, 2022, we terminated the franchise agreements of Royal Texas, LLC ("Royal Texas"), a franchisee that operated 52 franchised restaurants in Houston, Texas for, among other things, operational defaults that we deemed to pose a threat or danger to public health and safety. On March 23, 2022, we and our affiliates filed the Texas Action against Royal Texas, asserting claims for breach of contract and to enforce the termination of the franchise agreements. We moved for an ex parte temporary restraining order, which the court granted on March 23, 2022. The court enjoined Royal Texas from operating the restaurants or using our Marks or System and requiring Royal Texas to turn over possession of the restaurants to us. We filed an Amended petition in the Texas Action adding David Davoudpour, BAH Texas, L.P., BAH Texas, LLC, BAH Texas Hospitality, Inc., Best American Hospitality Corp., Triangle Capital Properties, LLC ("Triangle"), all of whom are affiliates of Royal Texas. Triangle removed the action to Texas federal court (the "Texas Federal Action"). On removal, the Texas State Action was stayed. Several months after removal, the parties stipulated to stay the Texas Federal Action pending resolution of the Georgia Action. The Texas Federal Action currently remains stayed.
Source: Item 3 — LITIGATION (FDD pages 14–16)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Texas State Action was removed to Texas federal court by Triangle Capital Properties, LLC ("Triangle"), who are affiliates of Royal Texas. The original action, filed by Cajun Global, LLC, Cajun Operating Company, Cajun Realty, LLC, and Cajun Funding Corp. against Royal Texas, LLC, concerned the termination of franchise agreements for operational defaults.
The initial lawsuit was filed in Harris County, Texas District Court, and an ex parte temporary restraining order was granted, preventing Royal Texas from operating the restaurants or using Churchs Chicken's marks or system. The suit was amended to include David Davoudpour, BAH Texas, L.P., BAH Texas, LLC, BAH Texas Hospitality, Inc., Best American Hospitality Corp., and Triangle Capital Properties, LLC, all affiliates of Royal Texas.
Following the removal to federal court, the Texas State Action was stayed. Subsequently, the parties agreed to stay the Texas Federal Action pending the resolution of a separate legal matter, the Georgia Action. As of the document's publication, the Texas Federal Action remains stayed.