Are there any exceptions to the requirement that Churchs Chicken franchisees participate in Churchs Holding's Supply Chain Department?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
m we have given (and not revoked) our written approval.
Church's Holding's Supply Chain Department provides purchasing and logistical services to the System. You must participate in Church's Holding's Supply Chain Department (or any successor we designate) and sign a Participation Memorandum regarding your participation substantially in the form attached as Exhibit U. The Supply Chain Department negotiates with certain vendors and suppliers for the benefit of franchisees as well as company-owned stores. The Supply Chain Department passes its costs and overhead to the System through surcharges on certain products, as detailed in Item 6. Currently, these surcharges are: $1.22 per case of flour (breading), $3.57 per case of regular chicken boxes, $3.57 per case of family chicken boxes, $1.10 per case of frying oil, and $4.71 per case of biscuit mix. The surcharges are
imposed by the suppliers of these products and then paid to the Supply Chain Department. The Supply Chain Department has a Board of Directors with 7 members. The Church's Independent Franchise Association appoints 3 members of the Board, the 2 largest franchisees (determined by annual revenue) appoint 2 members of the Board, and we appoint the remaining 2 members of the Board. The budget of the Supply Chain Department, including the surcharges on certain products, is subject to the appro
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 participate in Churchs Holding's Supply Chain Department, or any successor the company designates. Franchisees are required to sign a Participation Memorandum regarding their involvement. The Supply Chain Department negotiates with vendors and suppliers for the benefit of both franchisees and company-owned stores.
The Supply Chain Department funds its operations by passing costs and overhead to the system through surcharges on certain products. These surcharges are detailed in Item 6 and include charges such as $1.22 per case of flour (breading), $3.57 per case of regular chicken boxes, $3.57 per case of family chicken boxes, $1.10 per case of frying oil, and $4.71 per case of biscuit mix. These surcharges are initially imposed by the suppliers and then remitted to the Supply Chain Department.
The Supply Chain Department is governed by a Board of Directors with 7 members. The Church's Independent Franchise Association appoints 3 members, the 2 largest franchisees (determined by annual revenue) appoint 2 members, and Churchs Chicken appoints the remaining 2 members. The budget of the Supply Chain Department, including the surcharges on certain products, requires approval from the Supply Chain Department's Board of Directors. The FDD does not explicitly state any exceptions to the requirement that franchisees participate in Churchs Holding's Supply Chain Department.