FranchiseVerdict
Church’s Texas Chicken logo
A48/100FDD 2025

Church’s Texas Chicken — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

Back to overview

Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
48 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
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

What drove the 48/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 4.0% YoY with 873 locations indicates shrinking system momentum and potential market saturation or operational challenges
  2. 02MEDNet income not disclosed in Item 19 prevents ROI validation; with $644k-$1.8M investment and only $1.09M avg revenue, profitability margin is opaque and concerning
  3. 03HIGHMultiple active litigations including franchisor-initiated enforcement cases (Carolina Café Services, Royal Texas LLC) and fraud settlements signal adversarial franchisor-franchisee relationships
  4. 04MINORRoyal Texas LLC ongoing dispute involving breach of contract, trademark infringement, and tortious interference suggests governance instability and potential brand/operational conflicts
  5. 05MEDHigh investment ceiling ($1.8M) relative to disclosed average revenue ($1.09M) creates unfavorable ROI floor even before accounting for 5% royalties, COGS, labor, and rent

Severity inferred from FDD text — not a regulatory or legal classification

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.