$96

Business Description

Cajun is a Delaware limited liability company formed on January 14, 2011. Our principal business address is 980 Hammond Drive, N.E., Suite 1100, Atlanta, Georgia 30328-6161. Our agents for service of process are listed in Exhibit B to this Franchise Disclosure Document. We do business under our corporate name and under the trade names Church’s® and Church’s Chicken® (as well as related trademarks and service marks). We have franchised Church’s Chicken Restaurants since our acquisition of the Church’s Restaurant business effective February 24, 2011. We do not currently operate any Church’s Restaurants, and we do not engage in any business not described in this Item 1.

Prior Experience

As of December 31, 2018, there were 1,543 restaurants in the System worldwide, including 1,086 Church’s Restaurants located within the domestic United States and Puerto Rico and 567 franchised Church’s Restaurants located outside the United States and its territories (some of which operate under the Texas Chicken name and trademarks). Of the 1,086 Church’s Restaurants located within the United States and its territories, as of December 31, 2018, there were: (1) 165 company-owned Church’s Restaurants; and 921 franchised Church’s Restaurants. We may offer and sell franchises for operation outside the United States on terms different than those described in this Franchise Disclosure Document and under different trademarks. In the U.S., we have not offered franchises other than for Church’s Restaurants, although we may do so in the future.

Business Offered

Church’s Restaurants are quick-service restaurants offering a limited menu of lunch and dinner products featuring flavorful chicken, both original and spicy, Tender Strips®, and southern style chicken sandwiches with classic sides and hand-made from scratch biscuits. You must operate Restaurants in accordance with the System. Restaurants may be opened in free-standing buildings, store-front locations including mall locations, college and university locations, convenience stores, travel plazas, and other locations, in either urban, suburban or rural areas. Restaurants may feature walk-in, drive-in, sit-down, delivery or catering formats, or some combination of these types of formats, with our approval.

Initial Fees

Development Fee. You must sign a Development Agreement regardless of the total number of Restaurants you commit to develop. You must pay a development fee (“Development Fee”) for each Restaurant to be developed under the same Development Agreement at the time you sign the Development Agreement. The Development Fee is $10,000 per Restaurant you agree to develop under the Development Agreement. Initial Franchise Fee. The initial franchise fee (“Franchise Fee”) is $15,000 for each Restaurant. You must pay the Franchise Fee, which is in addition to the Development Fee, when you sign the Franchise Agreement for each Restaurant. You must sign the Franchise Agreement within 120 days after we accept a site for the Restaurant and before opening the Restaurant. Incentive Programs. We may offer promotions for limited periods of time in the form of reduced franchise or development fees, limited royalty waivers, and other incentives as part of certain programs designed to promote the execution of Development Agreements and Franchise Agreements and to encourage the development and opening of Restaurants. We may change or eliminate such promotions at any time. We may limit the promotions to certain target markets. We may impose conditions on any incentive programs. New Development Incentive Program 2020. We have implemented a new development incentive program (“NDIP 2020”) for Restaurants that are developed pursuant to a new Development Agreement signed before December 31, 2020 that provides for the development of up to 5 Restaurants, with a minimum of 3 Restaurants. Simultaneously with your execution of the Development Agreement, you will sign a New Development Incentive Program Addendum to the Development Agreement in the form attached as Exhibit V. For the Restaurants under the new Development Agreement to be eligible for the NDIP 2020, you must open the first Restaurant by no later than 18 months following the date of the Development Agreement (you may request a one-time cure to extend this 18-month period by up to 6 months by paying a $3,000 nonrefundable extension fee, which we will apply to the Franchise Fee owed on the first Restaurant you open under the Development Agreement). The first Restaurant developed under the NDIP 2020 will pay standard fees. The NDIP 2020 benefits will apply to the following Restaurants that you open under the Development Agreement (each an “Eligible Restaurant”): (i) the second Restaurant that you open no later than 12 months following the opening date of the first Restaurant; (ii) the third Restaurant that you open no later than 12 months following the opening date of the second Restaurant; and (iii) each additional Restaurant that you open no later than 12 months following the opening date of the previous Restaurant. When you sign the Franchise Agreement for each Eligible Restaurant that you develop and open in accordance with the terms of the Development Schedule and the NDIP 2020 requirements, you will sign a New Development Incentive Program Addendum to the Franchise Agreement in the form attached as Exhibit V. The development incentives for each Eligible Restaurant are listed below (the “NDIP 2020 Incentives”). The NDIP 2020 Incentives may not be combined with any other franchise fee or royalty incentives. If you acquire existing Restaurants from another franchisee, we have the option, in our sole discretion, to offer or not offer the NDIP 2020 Incentives for those Restaurants. * * * All of the fees described above must be paid in full. Except as noted, none are refundable. Generally, our Development and Franchise Fees are uniformly imposed on our franchisees. However, in certain unique circumstances, we may reduce or waive a fee for a particular franchisee. In the State of Maryland only, all of the fees described above are deferred until we satisfy all of our pre-opening obligations described in Item 11 “Pre-Opening Obligations”. Upon satisfying our Pre-Opening obligations, the fees described previously must be paid in full and are not refundable. Generally, our Development and Franchise Fees are uniformly imposed on our franchisees. However, in certain unique circumstances, we may reduce or waive a fee for a particular franchisee.

Financing

We are not obligated to offer directly or indirectly any arrangements for financing of your initial investment, your equipment, or the continued operation of your franchise. You must make your own financing arrangements. However, we have an agreement with Pacific Premier Bank (the “Lender”) to offer financing to qualified franchisees to purchase inventory, equipment, furniture and trade fixtures (collectively, “Assets”), for our “STAR” (System Transformation and Revitalization) reimage program. You will only be eligible for this financing if you are doing a Star reimage of your existing Restaurant as required under the terms of your franchise agreement or to enable you to qualify to renew your franchise agreement. You will not be able to obtain financing for newly built Restaurants under this program. The Lender offers two different programs; a conventional loan and a United States Small Business Administration (“SBA”)–guaranteed loan. Each loan is subject to credit approval. Conventional Loan – The maximum loan for each Restaurant you want to finance is $150,000, not to exceed the cost of the reimage. You do not have to pay any down payment. The financing is made in the form of one or more advances of at least $25,000 or 40% of the total loan amount. You cannot request more than one advance in any calendar month during the loan term and the outstanding principal balance of the loan (together with the amount in any requested advance) cannot exceed 85% of the total loan amount until the reimaging of a Restaurant has been completed. During the time you are requesting advances, the loan will bear an interest rate of 12% per annum and you must make monthly payments of interest. If you have not taken all the advances within 45 days, the Lender can increase the interest rate to 14% per annum. Once you have taken the last advance, the interest rate will be fixed for the term of the loan at a rate equal to the Constant Maturity Treasury Rate most closely matching the term of your loan as reported by the Federal Reserve Board on the date you close your loan plus 400 basis points. Based on interest rates in effect as of May 3, 2017, the interest rate on a 5 year loan would be 5.81% per annum. The loan will then have a term of 3 to 7 years. You will not have to make any payments on the loan for the first 60 days of this term. After that, the principal and interest due on the loan will be amortized over the remaining term of the loan. Your actual monthly payment will depend on the amount financed, the term of the loan, and the interest rate in effect on the date you close the loan. To qualify for this loan, you must own at least three (3) Restaurants. There is an origination fee of 0.50% due to the Lender at closing, but you can add this fee to the principal of your loan. There is also a $1,500 loan package fee. However, we will pay $2,500 of your obligation to the Lender, which can be applied to this packaging fee and to your interest before the loan begins amortizing. You must provide a first or second lien on all the Restaurant’s assets to secure the loan, and a first lien on any items you purchase with the loan proceeds. Regardless of the number of Restaurants you have, there is a $500,000 limit on the amount you can borrow, unless you can secure any additional loans with a first security interest in the Restaurant’s assets. Anyone who owns 10% or more of your business must also personally guarantee repayment of the loan. You may prepay the loan at any time, but if you do so during the first 5 years, you must pay a prepayment fee equal to 1% of the amount prepaid. If the loan term is longer than the term of your franchise agreement or the lease for your Restaurant, and if the franchise agreement or lease is not renewed, you may be required to prepay the entire outstanding balance in full within 30 days of expiration of the franchise agreement or lease. If you default under the loan, the Lender can declare immediately due all amounts loaned, take the assets on which they filed a lien and sell them, assess late charges and hold you responsible for any deficiency. The Lender can also increase the interest rate to as much as 18% per annum following a default. By defaulting, you are also losing certain legal rights like the right to notice and demand. A default includes your failure to perform any of your obligations under the loan documents, a material adverse change in your business, a change of control of your business, the Lender deeming itself to be insecure, and any default under your franchise agreement or lease that results in the termination of either of those agreements. The loan documents are governed by New York law. The Lender can sue you in New York, and if they win, you must pay their court costs and attorneys’ fees. A copy of the Equipment Loan and Security Agreement, form of Multiple Advance Promissory Note, and Unconditional Guaranty of Payment and Performance you will sign for this loan are attached as Exhibit Q. SBA-Guaranteed Loan – The SBA-guaranteed loan is available for even a single Restaurant. It will also have a term of 3 to 7 years. The interest rate will be a variable rate. It will begin at the prime rate announced in the Wall Street Journal as of the date you close the loan, plus 2.75%. Based on interest rates in effect on May 3, 2016, the initial interest rate would be 6.75% per annum. However, that rate will be adjusted quarterly. You will not have to make any payments on the loan for the first 60 days. After that, the principal and interest due on the loan will be amortized over the remaining term of the loan. Your initial monthly payment will depend on the amount financed, the term of the loan, and the interest rate in effect on the date you close the loan. However, the payment will be adjusted quarterly based on changes in the interest rate. To qualify for this loan, you must meet SBA requirements. The maximum for each Restaurant you finance is $150,000, not to exceed the cost of the reimage. You do not have to pay any down payment. There is a $2,000 loan packaging fee. However, we will pay $2,500 of your obligation to the Lender, which can be applied to this packaging fee and to your interest before the loan begins amortizing. You must provide a first or second lien on all of the Restaurant’s assets, and a first lien on any items purchased with the loan proceeds. You must also personally guarantee the loan, and you may be required to grant a lien on your primary residence to secure your guaranty. You can prepay the loan any time without penalty. You will be in default under the loan documents if you fail to make a payment when due, fail to preserve or insure the collateral, fail to do anything required by the loan documents, if there is a change in ownership of 25% or more of the equity of your business, or if there is an adverse change in your business that the Lender believes materially affects your ability to repay the loan. If you default, the Lender can require the immediate payment of all amounts remaining under the note, take possession of the collateral, and sell, lease, or otherwise dispose of the collateral and hold you liable for any deficiency. You must also pay all costs and expenses incurred by the Lender to collect any amounts you owe, including attorneys’ fees. The loan documents will typically be governed by federal law, but the Lender can bring a lawsuit against you in California. A sample of the SBA loan documents as of the Issuance Date is attached as Exhibit R. Except as noted above, neither we nor any agent or affiliate offers direct or indirect financing to you, guarantees any note, lease or obligation of yours, or has any practice or intent to sell, assign or discount to a third party all or any part of any financing arrangement of yours. If you are interested in obtaining a loan guaranteed by the SBA for the development of a new Restaurant, we are listed on the SBA Franchise Registry. The SBA Franchise Registry is a listing, hosted through FRANdata, of franchise systems whose franchisees may receive faster SBA loan processing because the franchise agreement has been pre-approved by the SBA. Our approval for eligibility or inclusion in the SBA Franchise Registry does not guarantee that you will qualify for SBA financing. Please visit the Franchise Registry’s website at www.franchiseregistry.com for more information.

Franchisee Revenue and Profit

A. Tabular Information Table 1 below presents information about the actual sales of certain domestic Church’s Restaurants during our 2018 fiscal year. Table 2 below presents information about the actual sales of certain domestic Church’s Restaurants during our 2017 and 2018 fiscal years. Table 3 presents information about the sales impact of reimaged Church’s Restaurants during our 2018 fiscal year. Table 1: 2018 Sales of Company and Franchised STAR Image Restaurants (Newly Built or Reimaged) Below are average Franchised Restaurant sales for fiscal year 2018 for 23 freestanding Restaurants that were newly-built or reimaged in the current STAR Image during FY 2018 and having at least 26 weeks of sales following build out. We compiled the sales data shown below from the information submitted to us by our franchisees for purposes of royalty reporting. We believe the information submitted by our franchisees to be accurate, but we have not audited or otherwise verified that information. Some restaurants have earned the amounts shown in the table below. Your individual results may differ. There is no assurance that you’ll earn as much. B. General Statements We will make available to prospective franchisees written substantiation for these financial performance representations upon reasonable request. Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing Restaurant, however, we may provide you with the actual records of that Restaurant. If you receive any other financial performance information or projections of your future income, you should report it to our management by contacting Craig Prusher, Cajun Global’s Chief Legal Officer, at 980 Hammond Drive, Suite 1100, Atlanta, GA 30328, or 770-350-3800, the Federal Trade Commission and the appropriate state regulatory agencies. Your individual financial results are likely to differ from results described in this Item 19. You should conduct an independent investigation of the costs and expenses you will incur in operating your Restaurant. Franchisees or former franchisees identified in this Franchise Disclosure Document may be one source of information.