Under the standard Churchs Chicken Development Agreement, is the Development Area exclusive?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 12 TERRITORY
Development Agreement.
Under our standard Development Agreement, you have a specific Development Area in which to develop one or more Restaurants. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
We may offer an amendment to the Development Agreement that provides limited territorial exclusivity ("Exclusive Development Agreement"), as negotiated between us based on your capabilities and our market development objectives.
The Development Agreement grants you the right and obligation to develop an agreed-on number of Restaurants in your Development Area according to an agreed-on Development Schedule. The Development Agreement does not grant you any options, rights of first refusal, or similar rights to acquire additional franchises inside or outside your Development Area. The size of the Development Area will vary considerably and is subject to our mutual agreement before the Development Agreement is signed. Factors that may affect the size of a Development Area include your wishes, the expansion capacity of the area contemplated, the competition in the area and your prior experience and financial capacity.
If you sign an Exclusive Development Agreement, you will be granted a geographic area within which we will not open a Restaurant, nor license anyone other than you to open a Restaurant, subject to the other terms of the Agreement. The exclusive development area does not include airports, train stations, bus stations, travel plazas, stadiums, arenas, convention centers, military facilities, schools, colleges, universities, hospitals, recreational theme parks, business or industrial foodservice venues, food courts, enclosed shopping malls and retail centers, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos or any similar captive market location, even if these locations are located in the Development Area.
Territorial exclusivity under the Exclusive Development Agreement does not depend on the achievement of a certain sales volume, market penetration or any other contingency;
Source: Item 12 — TERRITORY (FDD pages 43–45)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the standard Development Agreement does not grant an exclusive territory. The FDD states that a franchisee may face competition from other franchisees, outlets that Churchs Chicken owns, other distribution channels, or competitive brands that Churchs Chicken controls. However, Churchs Chicken may offer an amendment to the Development Agreement that provides limited territorial exclusivity, called an "Exclusive Development Agreement," which is negotiated based on the franchisee's capabilities and Churchs Chicken's market development objectives.
Under an Exclusive Development Agreement, Churchs Chicken will not open a Restaurant, nor license anyone other than the franchisee to open a Restaurant, within a defined geographic area, subject to the agreement's terms. However, this exclusivity does not extend to locations such as airports, train stations, travel plazas, stadiums, convention centers, military facilities, schools, hospitals, theme parks, food courts, malls, or other similar captive market locations, even if they fall within the Development Area.
It's important to note that territorial exclusivity under an Exclusive Development Agreement is not contingent on achieving specific sales volumes or market penetration. However, the franchisee must adhere to the terms of the agreement, including the obligation to open and maintain an agreed-upon number of Restaurants according to the Development Schedule. Failure to comply with the Development Schedule may result in Churchs Chicken terminating the Development Agreement or, if applicable, terminating the limited territorial exclusivity.