Under what circumstances can the Churchs Chicken development incentive addendum be terminated following written notice to the developer?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum, and the development incentives offered pursuant to this Addendum, shall terminate following written notice to Developer upon the occurrence of any of the following events during the Development Incentive Period:
- A. Developer fails to open the first Franchised Restaurant under the Development Agreement by the First Restaurant Deadline;
- B. Developer fails to open its second or any additional Franchised Restaurant within twelve months following the opening date of the previous Franchised Restaurant opened by Developer under the Development Agreement;
- C. Developer fails to meet any Site Acceptance Date or Opening Date for any Franchised Restaurant required to be developed under the Development Agreement; or
- D. Developer receives a written notice of default under the Development Agreement or any other agreement with Cajun or its affiliates and fails to cure the default within the applicable cure period, if any.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken Franchise Disclosure Document, the Development Incentive Addendum, which outlines the Platinum Incentive Plan, can be terminated with written notice to the developer under specific circumstances during the Development Incentive Period. These circumstances include failure to meet certain development milestones.
Specifically, the addendum can be terminated if the developer fails to open the first franchised restaurant under the Development Agreement by the First Restaurant Deadline. It can also be terminated if the developer fails to open the second or any subsequent franchised restaurant within twelve months following the opening date of the previous franchised restaurant.
Additionally, the addendum can be terminated if the developer fails to meet any Site Acceptance Date or Opening Date for any franchised restaurant required to be developed under the Development Agreement. Finally, termination can occur if the developer receives a written notice of default under the Development Agreement or any other agreement with Cajun or its affiliates and fails to cure the default within the applicable cure period.
If the Development Incentive Addendum is terminated, the developer will not receive any further development incentives for additional franchised restaurants developed under the Development Agreement. Furthermore, any open and operating franchised restaurant that had been receiving a reduced royalty rate as a development incentive will immediately revert to the standard 5% royalty rate, impacting the franchisee's ongoing costs and profitability.