Are there any exceptions to the restrictions on the Guarantor regarding restaurant or foodservice operations for a Churchs Chicken franchise?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) The restrictions in Sections 4(a)(ii) and 4(b) shall not apply to Franchisee's existing restaurant or foodservice operations, if any, which are identified in Schedule 1 to the Agreement, nor shall such restrictions apply to other restaurants operated by Franchisee that are franchised by Cajun or its affiliates.
If a court finds that any restriction in Section 4(a) or 4(b) does not comply with O.C.G.A § 13-8- 53, then pursuant to O.C.G.A. § 13-8-54, it is the intent of the parties that the court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Cajun.
If, at any time during the restrictive period following the expiration or earlier termination of the Agreement, Guarantor fails to comply with Guarantor's obligations under this Section, that period of noncompliance will not be credited toward Guarantor's completion of the restrictive period.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, there are exceptions to the restrictions placed on the Guarantor regarding restaurant or foodservice operations. These exceptions apply to the Guarantor's existing restaurant or foodservice operations, if any, which are identified in Schedule 1 to the Franchise Agreement.
Specifically, the restrictions outlined in Sections 4(a)(ii) and 4(b) do not apply to these pre-existing operations. Furthermore, these restrictions also do not extend to other restaurants operated by the Franchisee that are franchised by Cajun or its affiliates. This means that if the Guarantor already owns or operates restaurants or foodservice businesses, or is involved in other franchises under Cajun or its affiliates, these businesses are generally exempt from the restrictions that would otherwise prevent them from having an ownership interest in a restaurant specializing in fried chicken (other than a Churchs Chicken restaurant).
It's also important to note that Cajun reserves the right to reduce the extent of any covenant in this section at its sole discretion, effective immediately upon the Guarantor's receipt of notice. Additionally, if a court finds any restriction in Section 4(a) or 4(b) unenforceable, the parties intend for the court to modify the restriction to protect Cajun's legitimate business interests. This ensures that the restrictions are applied reasonably and legally.