ATLANTA – Church’s Chicken franchisees can defer 50% of their royalties and ad fund contributions for the next four weeks as part of a franchisee relief plan announced by company executives. The plan went into effect March 30.
“The goal is to secure a swift recovery as soon as possible and that requires cash on hand,” said Dusty Profumo, chief financial officer at Church’s Chicken. “Also, by working with our franchisees, we are encouraging them to honor this reduced royalty structure and pay on time so that we can collectively move the brand forward.”
Joe Christina, chief executive officer at Church’s, said the company was ahead of plan with 36 of 52 weeks of positive sales in 2019. In eight out of 13 periods, Church’s outperformed competitors in the category until several weeks ago.
“But literally, from one week to the next, the world changed, and we need to change with it,” he said. “That means ensuring our franchisees preserve cash so that they can continue to pay their employees, serve our guests and support the communities we operate in.”
Christina said that, despite sales declines in the teens, Church’s remains in a strong position to weather the current downturn. Most Church’s domestic restaurants easily shifted to takeout and delivery from dine-in business which provided continuity of service. Church’s launched one of the first third-party delivery services in the chicken category in 2018. In early 2019, the chain implemented Order Ahead, Pay Ahead followed by the expansion of the Church’s-To-Go platform.
“I am extremely proud of the values we stand for as an organization,” Christina said. “Across the world, our teams are working together, showing they care about the business, stepping up as best they can despite these unfortunate circumstances. Everyone in our organization is demonstrating the values that define us by doing the right thing, demonstrating great conviction to see things through. Together, we will get through this.”