Industry News | March 3, 2007

Church's Responds to AFCE Suit

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In response to news of a recent suit filed by AFCE, Church's Chicken released the following statement:

The purchase of closed Popeye’s stores in the Rio Grande Valley from CVI Company, LTD of McAllen Texas was undertaken in the normal course of business. Church’s did not initiate any contact or communication with CVI, nor did it solicit the offer or sale of any asset of CVI. Church’s was approached by third parties. Church’s purchased vacant assets in a competitive bid situation, which is a common and accepted practice.

We note that it is quite common in the QSR industry for restaurants to change hands. Given this common occurrence, we are surprised at both the substance, and most importantly, the tone of Popeye’s release and accusations.

“I know it can be difficult to lose a business battle,” said Church’s Chief Executive Officer Harsha Agadi. “But it is simply unacceptable when that loss leads a competitor to accuse us of unethical behavior. Church’s has not only acted within the law, but is always committed to upholding the highest ethical standards. Quite simply, the accusations made by Popeye’s, legal and ethical, are completely without merit.”

Corporate Counsel Ken Cutshaw added, “We are confident Church’s will ultimately prevail if the case makes to a courtroom.”

Expansion in the Rio Grande Valley has been and continues to be a strategic initiative of Church’s. CEO Agadi added that “we’ve always had market share in that area and we are excited to expand and provide easier access for our loyal customers.”