Under what circumstances can Cajun terminate the Churchs Chicken Development Agreement without giving the Developer an opportunity to cure?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- **A.
Grounds for Termination.** Cajun may terminate this Agreement, and the rights granted by this Agreement, upon notice to Developer without an opportunity to cure upon the occurrence of any of the following events:
- (1) Developer fails to comply with the Development Schedule for any reason, including failing to: (a) obtain Cajun's acceptance of a site by the applicable site acceptance date listed in Schedule 2; or (b) have open and operating the number of Franchised Restaurants required by the Development Schedule.
A default under this Section 15.A.(1) shall not constitute a default under any existing Franchise Agreement between Developer and Cajun or its affiliates.
(2) Developer begins construction of a Franchised Restaurant before: (a) Cajun has accepted the site for that Franchised Restaurant; (b) Developer has received notification from Cajun that it has accepted the Construction Plans for that Franchised Restaurant; (c) Developer has provided Cajun a copy of the fully-executed lease or sublease for the Franchised Restaurant premises, or if Developer owns the premises, proof of Developer's ownership interest; and (d) Developer has procured the insurance coverages required by Section 8.
(3) Developer is insolvent or is unable to pay its creditors (including Cajun); files a petition in bankruptcy, an arrangement for the benefit of creditors or a petition for reorganization; there is filed against Developer a petition in bankruptcy, an arrangement for the benefit of creditors or petition for reorganization, which is not dismissed within 60 days of the filing; Developer makes an assignment for the benefit of creditors; or a receiver or trustee is appointed for Developer and not dismissed within 60 days of the appointment.
If Developer has received a notice of default pursuant to this Section 15.A.(13) within the previous 12 months, Cajun shall be entitled to send Developer a notice of termination upon Developer's next default under this Section 15.A.(13) within that 12-month period without providing Developer an opportunity to remedy that default.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Cajun may terminate the Development Agreement without giving the Developer an opportunity to cure under specific circumstances. These circumstances include if the Developer fails to comply with the Development Schedule, such as failing to obtain Cajun's acceptance of a site by the specified date or failing to have the required number of restaurants open and operating per the Development Schedule. This failure to meet the development obligations allows Cajun to terminate the agreement immediately.
Additionally, Cajun can terminate the agreement without an opportunity to cure if the Developer begins construction of a Churchs Chicken restaurant before receiving site acceptance from Cajun, before receiving notification that Cajun has accepted the Construction Plans, before providing a fully-executed lease or proof of ownership, and before procuring the required insurance coverages. These preconditions to construction are critical, and bypassing them constitutes grounds for immediate termination.
Furthermore, Cajun can terminate the Development Agreement without allowing an opportunity to cure if the Developer becomes insolvent, is unable to pay creditors (including Cajun), files for bankruptcy or a similar arrangement, makes an assignment for the benefit of creditors, or has a receiver or trustee appointed. Finally, if a developer has received a notice of default within the previous 12 months, Cajun can send a notice of termination upon the developer's next default without providing an opportunity to remedy that default.