When transferring a Churchs Chicken franchise, what kind of release and covenant not to sue must the franchisee execute?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Franchisee, all individuals who executed this Agreement and all guarantors of Franchisee's obligations must execute a general release and a covenant not to sue, in a form satisfactory to Cajun, of any and all Claims (as defined in Section 16) against Cajun and its affiliates and their respective past and present officers, directors, shareholders, agents and employees, in their corporate and individual capacities, including, without limitation, Claims arising under federal, state and local laws, rules and
ordinances, and including, without limitation, Claims arising out of, or relating to, this Agreement or any other agreements between Franchisee and Cajun.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, when transferring a franchise, the franchisee, all individuals who executed the franchise agreement, and all guarantors of the franchisee's obligations must execute a general release and a covenant not to sue. This release must be in a form satisfactory to Churchs Chicken.
The general release and covenant not to sue covers any and all claims against Churchs Chicken, its affiliates, and their respective past and present officers, directors, shareholders, agents, and employees in their corporate and individual capacities. These claims include, without limitation, those arising under federal, state, and local laws, rules, and ordinances, as well as claims arising out of or relating to the franchise agreement or any other agreements between the franchisee and Churchs Chicken.
This requirement ensures that Churchs Chicken is protected from potential legal liabilities or disputes that may arise from the franchisee's operation of the franchise prior to the transfer. The inclusion of all individuals who executed the agreement and all guarantors broadens the scope of protection for Churchs Chicken, covering various parties involved in the franchise agreement. The release and covenant not to sue is a standard practice in franchising to provide legal closure upon the transfer of ownership and responsibilities.