A64/100

Church's Chicken: Litigation & Risk

Full-Service Restaurants · FDD Items 3, 4 & 5

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Elevated Risk

6 cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed: 6; Total from FDD Items 3 and 4

Bankruptcy (Item 4): Disclosed; Franchisor or officer bankruptcy

Verdict score: 64 / 100; FranchiseVerdict composite · higher is better

Rating: A; A / B / C / D / F verdict grade

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans: 31; Government-backed loans issued

Charge-off rate: 5.6%; vs 16% franchise average

5-yr charge-off rate: N/A

Defaults: 1 loans; Loans charged off or defaulted

Total loan volume: $23.9M

Avg loan size: $770K

Participating lenders: 19

FDD Items 5, 6 & 17: What You Give Up

Contract Risk Indicators

Mandatory arbitration: Not required; You retain the right to sue in court

Non-compete: 2 yrs; Post-termination restriction on similar businesses

Franchisor can compete: Yes; Franchisor can open competing locations in or near your territory

Right of first refusal: Yes; Franchisor can match any purchase offer when you try to sell

Governing law: Georgia; State whose law governs disputes. Relevant if you're not based there

Extracted from FDD Item 3

Litigation Detail

2 concluded franchise cases (Georgia/Mississippi 2018 termination dispute settled 2018-2019; California third-party tortious interference claim dismissed 2025) and 3 pending cases, all stemming from the 2022 termination of Royal Texas, LLC's 52-restaurant Houston franchise (breach of contract counterclaims, tortious interference claims by Royal Texas affiliates).

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice. Consult a franchise attorney before signing any franchise agreement.