After the transfer, expiration, or termination of the Churchs Chicken franchise agreement, for how long is a franchisee prohibited from having an ownership interest in a restaurant business that specializes in the sale of fried chicken within a specified radius?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) Franchisee further covenants that following the transfer, expiration or earlier termination of this Agreement, regardless of the cause for termination, Franchisee shall not, either directly or indirectly, for itself or through, on behalf of, or in conjunction with any person or entity:
- (a) for a period of 2 years, have an ownership interest in any restaurant business (other than a Church's Restaurant) that specializes in the sale of fried chicken and that is (i) located at or within a 5-mile radius of the Franchised Location, or (ii) located within a 5-mile radius of any Church's Restaurant that is then in existence or under development.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, a franchisee is restricted from holding an ownership stake in a fried chicken restaurant (excluding another Churchs Chicken) for a period of two years following the transfer, expiration, or termination of their Franchise Agreement. This restriction applies regardless of the reason for termination.
This non-compete clause extends to any restaurant business located either at the former franchised location or within a 5-mile radius of any existing or developing Churchs Chicken restaurant. This measure aims to protect Churchs Chicken's market share and brand integrity by preventing former franchisees from directly competing in close proximity to existing Churchs Chicken locations.
It is important to note that these restrictions do not apply to any existing restaurant or foodservice operations the franchisee may have that are identified in Schedule 1 of the agreement, or to other restaurants operated by the franchisee that are also franchised by Cajun or its affiliates. Additionally, Cajun reserves the right to reduce the extent of this covenant at its discretion, effective immediately upon notice to the franchisee. If a franchisee fails to comply with these obligations, the period of noncompliance will not count towards the completion of the restrictive period, provided Cajun takes action to enforce the obligations within the restrictive period.