Angry_Chickz 2025 Franchise FAQ - FDD Ninja

Question 1

What amounts, besides franchise fees and royalties, might an Angry Chickz franchisee be required to pay to the company or its affiliates?

Accepted Answer

e Franchisee to pay any amounts due under this Agreement or otherwise by means other than EFT automatic debit (e.g., by check) whenever Company deems appropriate, and Franchisee agrees to comply with Company's payment instructions.

### 4.8 **Other Payments**.

- 4.8.1 Franchisee shall also pay to Company, its Affiliates and designees, as applicable, promptly when due:
- (a) all amounts advanced by Company or which Company has paid, or which Company has become obligated to pay on behalf of Franchisee for any reason whatsoever;
- (b) the amount of all sales taxes, use taxes, service taxes, personal property taxes, value added taxes, and similar taxes, which may be imposed upon Franchisee, but required to be collected or paid by Company (i) on account of Franchisee's Gross Sales, or (ii) on account of fees collected by Company from Franchisee (but excluding Company's ordinary income taxes). Company, in its discretion, may collect the taxes in the same manner as the Continuing Royalty is collected and promptly pay the tax collections to the appropriate Governmental Authority; provided, however, that unless Company so elects, it shall be Franchisee's responsibility to pay all sales, use or other taxes imposed now or in the future by any Governmental Authorities on fees paid by Franchisee to Company; and
- (c) all amounts due for any reason, including for the purchase of goods, supplies or services relating to the Franchised Business.
  - 4.8.2 Should it ever be determined by legislation, regulation or other means, that Company's (or any of its Affiliates) and Company's franchisees

are joint employers or that Franchisee (or any of its employees or contractors) is an employee of Company (or any of its Affiliates), all costs associated with that change in relationship, including wages, taxes, insurance and other costs, without limitation, will be borne by Franchisee initially and on an ongoing basis. Should it ever be determined that any supply chain or any other contractual included revenue to Company or its Affiliates is modified or disallowed by legislation, regulation or other means, the parties agree that Company, in its sole and exclusive determination may increase royalty rates and other means to compensate for that lost revenue.

- 4.8.3 Franchisee shall remain current and fully comply and perform each of its obligations to its landlord, vendors and Suppliers.
- 4.9 **Application of Funds**. If Franchisee becomes delinquent in the payment of any obligation to Company or any of its Affiliates under this Agreement or any other agreement, Company shall have the absolute right to apply any payments received from Franchisee to any obligation owed Company or such Affiliate, notwithstanding any contrary designation by Franchisee.
- 4.10 **Interest and Charges for Late Payments**. If Franchisee fails to pay to Company all sums owed to Company or its Affiliates promptly when due, Franchisee shall pay interest on the unpaid amounts from the date due, at the rate of 18% per annum, or the highest rate allowable under Applicable Law, whichever is less. If any check, draft or electronic transfer is unpaid because of insufficient funds or otherwise, then Franchisee shall pay Company's expenses arising from such non-payment, including bank fees in the amount of at least \$50.00, or the maximum amount allowable under Applicable Law, whichever is less.

### **ARTICLE 5 SITE SELECTION; CONSTRUCTION AND COMMENCEMENT OF BUSINESS**

### 5.1 **Search Area; Site Selection**.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 2

What is the effect of the Washington Franchise Investment Protection Act on the Angry Chickz Franchise Agreement?

Accepted Answer

tors is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h).
- **18. Advisory Regarding Franchise Brokers.** Under the Washington Franchise Investment Protection Act, a "franchise broker" is defined as a person that engages in the business of the offer or sale of franchises. A franchise broker represents the franchisor and is paid a fee for referring prospects to the franchisor and/or selling the franchise. If a franchisee is working with a franchise broker, franchisees are advised to carefully evaluate any information provided by the franchise broker about a franchise.

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC FRANCHISE AGREEMENT (State of Washington)**

| THIS ADDENDUM is entered into as of, 20 between ANGRY                           |  |
|---------------------------------------------------------------------------------|--|
| CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and |  |
| , a ("Franchisee"), with reference to the                                       |  |
| following:                                                                      |  |

- **1. Background**. The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Agreement regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.
- **2. Conflict of Laws.** In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
- **3. Franchisee Bill of Rights.** RCW 19.100.180 may supersede provisions in the Franchise Agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the Franchise Agreement or related agreements concerning your relationship with the franchisor. Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
- **4. Site of Arbitration, Mediation, and/or Litigation.** In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the Franchise Agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
- **5. General Release.** A release or waiver of rights in the Franchise Agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2). In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
- **6. Statute of Limitations and Waiver of Jury Trial.** Provisions contained in the Franchise Agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

- **7.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 3

What was the total number of Angry Chickz outlets at the end of 2024?

Accepted Answer

| Outlet Type     | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|-----------------|------|-------------------------------------|-----------------------------------|------------|
|                 | 2022 | 0                                   | 0                                 | 0          |
| Franchised      | 2023 | 0                                   | 0                                 | 0          |
|                 | 2024 | 0                                   | 1                                 | +1         |
| Company- and    | 2022 | 13                                  | 18                                | +5         |
|                 | 2023 | 18                                  | 24                                | +6         |
| Affiliate-Owned | 2024 | 24                                  | 27                                | +3         |
|                 | 2022 | 13                                  | 18                                | +5         |
| Total Outlets   | 2023 | 18                                  | 24                                | +6         |
|                 | 2024 | 24                                  | 28                                | +4         |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 51–54)

Question 4

What was the total number of Angry Chickz outlets opened across all locations in 2024?

Accepted Answer

fecting an outlet, this table shows the event that occurred last in time.

Table No. 4 **Status of Company- and Affiliate-Owned Outlets For Years 2022 through 2024**

| State | Year | Outlets at Start of Year | Outlets Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Arizona | 2022 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 1 |
| California | 2022 | 12 | 4 | 0 | 0 | 0 | 16 |
|  | 2023 | 16 | 6 | 0 | 0 | 0 | 22 |
|  | 2024 | 22 | 3 | 0 | 0 | 0 | 25 |
| Nevada | 2022 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 1 |
| Totals | 2022 | 13 | 5 | 0 | 0 | 0 | 18 |
|  | 2023 | 18 | 6 | 0 | 0 | 0 | 24 |
|  | 2024 | 24 | 3 | 0 | 0 | 0 | 27 |
Table No. 5 **Projected Openings as of January 1, 2025**

| State        | Franchise Agreements Signed But Outlet Not Opened | Projected New Franchise Outlets in 2025 | Projected New Company or Affiliate-Owned Outlets in 2025 |
|--------------|---------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------------|
| Arizona      | 0                                                       | 0                                             | 0                                                              |
| California   | 0                                                       | 0                                             | 6                                                              |
| Illinois     | 1                                                       | 1                                             | 0                                                              |
| Pennsylvania | 1                                                       | 1                                             | 0                                                              |
| Texas        | 1                                                       | 2

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 51–54)

Question 5

What is the total number of pages in the Angry Chickz manual, according to the chapter titles listed?

Accepted Answer

| Chapter Title                           | Number of Pages    |
|-----------------------------------------|--------------------|
| Preface and Introduction | 8 |
| Introduction | 5 |
| Menu Offerings | 1 |
| Front of House Operations and Standards | 14 |
| Back of House Operations and Standards | 20 |
| Safety and Security | 20 |
| Labor Management | 30 |
| Financial Management | 12 |
| Marketing | 41 Total Pages 151 |

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 6

Under the Angry Chickz Continuing Guaranty, what specific notices is the guarantor waiving?

Accepted Answer

- 4.1 Without limiting the generality of any other provision of this Continuing Guaranty, Guarantor expressly waives: (i) notice of the acceptance by Franchisor of this Continuing Guaranty; (ii) notice of the existence, creation, payment, nonpayment, performance or nonperformance of all or any of the Obligations; (iii) presentment, demand, notice of dishonor, protest, notice of protest and all other notices whatsoever with respect to the payment or performance of the Obligations or the amount thereof or any payment or performance by Guarantor under this Agreement; (iv) all diligence in collection or protection of or realization upon the Obligations or any thereof, any obligation under this Agreement or any security for or guaranty of any of the foregoing; (v) any right to direct or affect the manner or timing of Franchisor's enforcement of its rights or remedies; (vi) any and all defenses which would otherwise arise upon the occurrence of any event or contingency described in Paragraph 1 hereof or upon the taking of any action by Franchisor permitted under this Agreement; (vii) any defense, right of set-off, claim or counterclaim whatsoever and any and all other rights, benefits, protections and other defenses available to Guarantor now or at any time hereafter, including, without limitation, under any suretyship statute of the State of California or where the guarantor is domiciled; and (viii) all other principles or provisions of law, if any, that conflict with the terms of this Continuing Guaranty, including, without limitation, the effect of any circumstances that may or might constitute a legal or equitable discharge of a guarantor or surety.

- 4.2 Guarantor waives all rights and defenses arising out of an election of remedies by Franchisor.

- 4.3 Guarantor further waives all rights to revoke this Continuing Guaranty at any time, and all rights to revoke any agreement executed by Guarantor at any time to secure the payment and performance of Guarantor's obligations under this Continuing Guaranty.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 7

How does the Washington Franchise Investment Protection Act protect Angry Chickz franchisees?

Accepted Answer

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

- **1.

Conflict of Laws.** In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.

- **2.

Franchisee Bill of Rights.** RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise.

There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor.

Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.

- **3.

Site of Arbitration, Mediation, and/or Litigation.** In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

- **4.

General Release.** A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).

In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).

- **5.

Statute of Limitations and Waiver of Jury Trial.** Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

- **6.

Transfer Fees.** Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.

- **7.

Termination by Franchisee.** The franchisee may terminate the franchise agreement under any grounds permitted under state law.

- **8.

Certain Buy-Back Provisions.** Provisions in franchise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.

- **9.

Fair and Reasonable Pricing.** Any provision in the franchise agreement or related agreements that requires the franchisee to purchase or rent any product or service for more than a fair and reasonable price is unlawful under RCW 19.100.180(2)(d).

- **10.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 8

Are the affiliate owned Angry Chickz stores operated in the same manner as franchised stores?

Accepted Answer

These affiliate owned stores are operated in the same manner as franchised stores will operate.

- 3.

No franchised stores are included because our first franchised store opened in calendar year 2024 and we do not have adequate data to include for that store.

**Some outlets have sold this amount. Your individual results may differ. There is no assurance that you'll sell as much.** Written substantiation for the financial performance representation will be made available to the prospective franchisee upon reasonable request.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)

Question 9

What are all the fees that Angry Chickz franchisees must pay, considering both the initial fees in Item 5 and the other fees in Item 6?

Accepted Answer

t – Initial Franchise Fee**

You must pay a \$50,000 lump sum initial franchise fee when you sign the franchise agreement. If you or your Operating Principal (see Item 15) or, prior to opening, their replacements, fail to complete initial training to our satisfaction and we terminate the Franchise Agreement only as a result of such failure, we will refund 50% of the initial franchise fee less our expenses. The refund described in the prior sentence only applies to the first franchise agreement signed by you and your affiliates. Except as described in this paragraph, the initial franchise fee is not refundable under any circumstances.

If you signed a form of Area Development Agreement which differs from our current form or current form of franchise agreement, your initial franchise fee will be determined in accordance with your Area Development Agreement.

### **Franchise Agreement – Grand Opening Support Fee**

You must pay us a \$20,000 lump sum grand opening support fee at least 90 days before the scheduled opening date of your Restaurant. The grand opening support fee, once paid, is not refundable under any circumstances.

### **Franchise Agreement – Rescheduling / Training Fee**

In connection with initial training, if you, your "Operating Principal" or other persons that attend initial training, fail to show competence in pre-training material and the initial training needs to be rescheduled, a training fee of \$5,000 per person may be required. The rescheduling / training fee is payable upon demand and is not refundable under any circumstances.

### **Franchise Agreement - Site Review Kit**

You must pay us a fee of \$500 per each Site Review Kit if you have submitted more than three Site Review Kits. We will visit the search area for a period not to exceed one full business day without additional fee or costs. If additional site visits are required by us or requested by you, then site visits will be arranged, and you will pay a fee of \$500 plus all expenses associated with the additional site visits. The Site Review Kit fee plus all expenses are payable upon demand and is not refundable under any circumstances.

Question 10

Are all Angry Chickz franchisees obligated to contribute to the Brand Fund at the same rate?

Accepted Answer

You must pay us a Brand Fee of up to 4% (presently 2%) of the Gross Sales of your Restaurant.

Other franchisees may not be obligated to contribute to the Brand Fund or may contribute at a different rate, as we determine appropriate.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–33)

Question 11

What is the highest total gross sales for the period represented by any single Angry Chickz location?

Accepted Answer

| Date Opened | Total Gross Sales for 2024 | Sq Footage |
|---|---|---|
| 11/9/18 | $576,325 | 900 sf |
| 8/29/19 | $793,625 | 950 sf |
| 2/11/20 | $2,085,275 | 1700 sf |
| 2/24/20 |  | 3500 sf |
| 5/1/20 | $3,292,156 | 2,460 sf |
| 8/28/20 | $2,386,848 | 2500 sf |
| 12/4/2020 | $1,972,257 | 2,035 sf |
| 1/15/21 | $3,593,250 | 2200 sf |
| 2/26/21 | $2,885,512 | 2800 sf |
| 3/26/21 | $3,078,932 | 2200 sf |
| 5/14/21 | $1,023,495 | 3000 sf |
| 7/9/21 | $3,285,982 | 3950 sf |
| 12/10/21 | $1,336,847 | 3000 sf |
| 1/21/2022 | $1,341,813 | 3,650 sf |
| 3/4/2022 | $1,653,841 | 3000 sf |
| 3/25/2022 | $2,947,905 | 2500 sf |
| 7/29/2022 | $2,286,164 | 3,209 sf |
| 10/7/2022 | $2,244,136 | 2,400 sf |
| 2/17/2023 | $2,682,511 | 2,700 sf |
| 3/17/2023 | $2,780,759 | 1,963 sf |
| 4/21/2023 | $1,580,228 | 2,805 sf |
| 7/21/2023 | $712,456 | 3,200 sf |
| 9/21/2023 | $2,126,848 | 2,571 sf |
| 10/23/2023 | $2,086,557 | 1,923 sf |

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)

Question 12

What is the range of the total initial investment for an Angry Chickz franchise, considering the initial franchise fee in Item 5 and the estimated initial investment in Item 7?

Accepted Answer

| Category of investment | Amount |  | Method of Payment | When Due | To Whom Paid |
|---|---|---|---|---|---|
|  | Low | High |  |  |  |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | When you sign your Franchise Agreement | Us |
| Construction and Leasehold Improvements1 | $240,000 | $500,000 | As incurred or per construction contract | Before opening | Approved general contractor |
| Architectural/ Engineering2 | $7,000 | $20,000 | As incurred | Before opening | Approved architect and engineer |
| Accountant and | $2,500 | $4,000 | As incurred | As incurred | Your financial |
| Attorney |  |  |  |  | and legal advisors |
| Equipment | $80,000 | $214,000 | As incurred | Before opening | Approved suppliers |
| Furniture & | $50,000 | $140,000 | As incurred | Before opening | Approved |
| Fixtures1 |  |  |  |  | suppliers |
| Signage | $17,000 | $65,000 | As incurred | Before opening | Approved suppliers |
| Opening Inventory, uniforms and Supplies | $36,500 | $63,000 | As incurred | When delivered | Approved suppliers |
| Category of | Amount |  | Method of | When Due | To Whom Paid |
| investment | Low | High | Payment |  |  |
| Smallwares | $11,000 | $14,000 | As incurred | Before opening | Approved suppliers |
| Computer Equipment & Information Systems3 | $9,000 | $20,000 | As incurred | As incurred - must purchase before opening | Approved supplier |
| Security System | $10,000 | $15,000 | As incurred | Before opening | Approved suppliers |
| Grand Opening Support Fee & Market Introduction Program | $35,000 | $55,000 | As Incurred | Before Opening | Us, Approved Suppliers |
| Prepaid Expenses, Licenses and Permits | $3,000 | $7,000 | As incurred | Before opening | Insurance companies, state county and city governments |
| Wages, Travel and | $15,000 | $50,000 | As incurred | Before opening | Airlines, hotels, |
| Living Expenses |  |  |  |  | Restaurants and |
| During Training4 |  |  |  |  | employees |
| Rescheduling | $0 | $5,000 | Lump Sum | Upon demand | Us |
| /Training Fee5 |  |  |  | (before opening) |  |
| Site Review Kits, | $0 | $1,000 | Lump Sum | Upon Demand | Us |
| Site Visit Costs |  |  |  |  |  |
| Rent / Lease | $15,000 | $40,000 | As incurred | Before opening | Suppliers |
| Deposit |  |  |  |  |  |
| Insurance and | $2,000 | $5,000 | As incurred | Before opening | Approved |
| Utility Deposits |  |  |  |  | suppliers |
| Additional Funds6 | $20,000 | $55,000 | As incurred | Before opening | Approved |
| – 3 Months |  |  |  |  | suppliers |
| Total | $603,000 | $1,323,000 | (exclusive of land costs) |  |  |

Question 13

What is the relationship between the initial franchise fee for Angry Chickz in Item 5 and the continuing royalty fee outlined in Item 6?

Accepted Answer

ous other items. The accompanying financial statements may not be indicative of conditions that would have existed if the Company had been operated as an unaffiliated entity.

The Company is in the business of franchising limited-service, fast casual restaurants, which aims to serve the best hot chicken with unmatched customer service. The franchise agreements are typically for ten years and will require the franchisee to pay an initial franchise fee of \$50,000 for each location to be opened. Once the franchisee begins operations, the Company will charge a royalty fee and brand fund fee of up to 6% and 2%, respectively, of the franchise gross sales. The Company opened its first franchise location in April 2024. The Member owns and operates 26 Angry Chickz corporate locations.

### Note 2 – Summary of Significant Accounting Policies

Basis of presentation – The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Company believes this information includes all adjustments, consisting of normal recurring accruals, necessary to fairly present the financial condition.

Question 14

What is the relationship between the initial franchise fee for Angry Chickz in Item 5 and the transfer/assignment fee in Item 6?

Accepted Answer

[Item 5: INITIAL FEES]

### **Area Development Agreement**

When you sign our current form of Area Development Agreement, you must pay us an initial development fee equal to $25,000 multiplied by the number of Angry Chickz Restaurants (excluding the first Restaurant, at a minimum of 2 restaurants) which you must open, plus $50,000 representing the initial franchise fee for your first Franchise Agreement. When we accept the site for each Restaurant, you will sign a separate Franchise Agreement and pay us an initial franchise fee for each required Restaurant. We will credit the development fee against the initial franchise fees (at the rate of $50,000 for the first restaurant and $25,000 each additional Restaurant until the development fee is exhausted). If we permit you to develop Restaurants during the term of your Area Development Agreement in excess of your development obligation, the initial franchisee for each of those Restaurants will be the then-current fee. If you signed a form of Area Development Agreement which differs from our current form, your initial franchise fees may be determined in accordance with your Area Development Agreement. The development fee is fully earned by us when paid, and is not refundable under any circumstances.

****

Question 15

What is the total estimated initial investment for an Angry Chickz franchise, combining the initial franchise fee from Item 5 and the other investment categories listed in Item 7?

Accepted Answer

| Category of investment | Amount |  | Method of Payment | When Due | To Whom Paid |
|---|---|---|---|---|---|
|  | Low | High |  |  |  |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | When you sign your Franchise Agreement | Us |
| Construction and Leasehold Improvements1 | $240,000 | $500,000 | As incurred or per construction contract | Before opening | Approved general contractor |
| Architectural/ Engineering2 | $7,000 | $20,000 | As incurred | Before opening | Approved architect and engineer |
| Accountant and | $2,500 | $4,000 | As incurred | As incurred | Your financial |
| Attorney |  |  |  |  | and legal advisors |
| Equipment | $80,000 | $214,000 | As incurred | Before opening | Approved suppliers |
| Furniture & | $50,000 | $140,000 | As incurred | Before opening | Approved |
| Fixtures1 |  |  |  |  | suppliers |
| Signage | $17,000 | $65,000 | As incurred | Before opening | Approved suppliers |
| Opening Inventory, uniforms and Supplies | $36,500 | $63,000 | As incurred | When delivered | Approved suppliers |
| Category of | Amount |  | Method of | When Due | To Whom Paid |
| investment | Low | High | Payment |  |  |
| Smallwares | $11,000 | $14,000 | As incurred | Before opening | Approved suppliers |
| Computer Equipment & Information Systems3 | $9,000 | $20,000 | As incurred | As incurred - must purchase before opening | Approved supplier |
| Security System | $10,000 | $15,000 | As incurred | Before opening | Approved suppliers |
| Grand Opening Support Fee & Market Introduction Program | $35,000 | $55,000 | As Incurred | Before Opening | Us, Approved Suppliers |
| Prepaid Expenses, Licenses and Permits | $3,000 | $7,000 | As incurred | Before opening | Insurance companies, state county and city governments |
| Wages, Travel and | $15,000 | $50,000 | As incurred | Before opening | Airlines, hotels, |
| Living Expenses |  |  |  |  | Restaurants and |
| During Training4 |  |  |  |  | employees |
| Rescheduling | $0 | $5,000 | Lump Sum | Upon demand | Us |
| /Training Fee5 |  |  |  | (before opening) |  |
| Site Review Kits, | $0 | $1,000 | Lump Sum | Upon Demand | Us |
| Site Visit Costs |  |  |  |  |  |
| Rent / Lease | $15,000 | $40,000 | As incurred | Before opening | Suppliers |
| Deposit |  |  |  |  |  |
| Insurance and | $2,000 | $5,000 | As incurred | Before opening | Approved |
| Utility Deposits |  |  |  |  | suppliers |
| Additional Funds6 | $20,000 | $55,000 | As incurred | Before opening | Approved |
| – 3 Months |  |  |  |  | suppliers |
| Total | $603,000 | $1,323,000 | (exclusive of land costs) |  |  |

Question 16

When must an Angry Chickz franchisee file a notice of intent to conduct business under the designated Marks?

Accepted Answer

- 11.7 **Assumed Name Registration**.

If required by Applicable Law, Franchisee shall promptly upon the execution of this Agreement file with Governmental Authorities a notice of its intent to conduct its business under the Mark(s) designated by the Company with only such

additional prefix or suffix, if any, as may be required by Company. Promptly upon the expiration or termination (including nonrenewal) of this Agreement Franchisee shall execute and file such documents as may be necessary to revoke or terminate such assumed name registration, or any other registrations or filings, and if Franchisee fails to promptly execute and file such documents, Franchisee hereby irrevocably appoints Company as its attorney-in-fact to do so for and on behalf of Franchisee.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 17

According to the Angry Chickz Area Development Agreement addendum, what triggers the execution of this addendum?

Accepted Answer

shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any |
| the parties in accordance with its terms. | Except as set forth herein, the Franchise Agreement shall be valid and enforceable between |
| as of the Effective Date identified below. | IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this Addendum |
| "Company" | "Franchisee" |
| ANGRY CHICKZ FRANCHISING LLC, | , |
| a California limited liability company | [ ] an individual [ ] a general partnership; [ ] a limited partnership; |
| By: | [ ] a limited liability company; |
| Name: | [ ] a corporation; |
| Its: | By: |
| Date of signing: | Name: Its: Date of signing: |
### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC AREA DEVELOPEMNT AGREEMENT**

**(State of Virginia)**

|                                                                                                                                                                                                | THIS ADDENDUM is entered into as of, 20 between ANGRY                                                |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|--|
|  | CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and , a ("Franchisee"), with reference to the |  |
| following: |  |  |
|  | The provisions of this Addendum form an integral part of, and are incorporated into, the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to you was made in the State of Virginia; (B) you are a resident of the State of Virginia; |  |
| and/or (C) the franchised business will be located in the State of Virginia. |  |  |
|  |  |  |
| 1. | Payment of all initial fees payable under the Area Development Agreement is deferred |  |
| until Franchisor has satisfied its pre-opening obligations to you under the Area Development |  |  |
| Agreement and your first Angry Chickz business opens to the public. |  |  |
| 2. | No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in |  |
|  |  |  |
| connection with the commencement of the franchise relationship shall have the effect of (i) |  |  |
| waiving any claims under any applicable state franchise law, including fraud in the inducement, | or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any |  |
| document executed in connection with the franchise. |  |  |
|  | Except as set forth herein, the Area Development Agreement shall be valid and enforceable |  |
| between the parties in accordance with its terms. |  |  |
|  | IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this Addendum |  |
| as of the Effective Date identified below. |  |  |
| "Company" | "Developer" |  |
|  |  |  |
| ANGRY CHICKZ FRANCHISING LLC, | , |  |
| a California limited liability company | [ ] an individual [ ] a general partnership; [ ] a limited partnership; |  |
| By: | [ ] a limited liability company; |  |
| Name: | [ ] a corporation; |  |
| Its: | By: |  |
| Date of signing: | Name: Its: Date of signing: |  |
### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC DISCLOSURE DOCUMENT FOR THE STATE OF WASHINGTON**

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

- **1. Conflict of Laws.** In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
- **2. Franchisee Bill of Rights.** RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 18

According to the California addendum, when is the initial franchise fee for an Angry Chickz franchise due?

Accepted Answer

7. The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 19

According to the Angry Chickz FDD, does the definition of 'Applicable Law' include laws that are amended or supplemented after the Effective Date?

Accepted Answer

"**Applicable Law**" means applicable common law and all applicable statutes, laws, rules, regulations, ordinances, policies and procedures established by any Governmental Authority, including, those governing the development, construction and operation of the Franchised Business, including all health and safety, labor, immigration, food and drug laws and regulations, the Americans with Disabilities Act, zoning laws, construction codes, and permit variance, conditional use permit or similar requirements and conditions, all as may be amended, supplemented or enacted from time to time.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 20

According to the Angry Chickz FDD, what happens if an Owner owning more than 20% of the Equity or voting power of Developer dies or becomes legally incapacitated?

Accepted Answer

- (a) Any Assignment or attempted Assignment in violation of the terms of Section 7.2 or 7.3, or without the written consents required pursuant to this Agreement; provided, however, (i) upon prompt written request to Company following the death or legal incapacity of a Developer who is an individual, Company shall allow a period of up to 60 days after such death or legal incapacity for his or her heirs, personal representatives, or conservators (the "**Heirs**") to seek and obtain Company's consent to the Assignment his or her rights and interests in this Agreement to the Heirs or to another person acceptable to Company; or (ii) upon prompt written request to Company following the death or legal incapacity of an Owner of a Developer which is an Entity, directly or indirectly, owning more than 20% or more of the Equity or voting power of Developer, Company shall allow a period of up to 60 days after such death or legal incapacity for his or her Heir(s) to seek and obtain Company's consent to the Assignment of such Equity and voting power to the Heir(s) or to another person or persons acceptable to Company. If, within said 60-day period, said Heir(s) fail to receive Company's consent as aforesaid or to effect such consented to Assignment, then this Agreement shall immediately terminate at Company's election.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 21

According to the Angry Chickz franchise agreement, is the Company obligated to allow the Heirs to assume the agreement or execute a new franchise agreement?

Accepted Answer

- 14.3.2 Assignment, Death or Incapacity.

If Franchisee shall purport to make any Assignment without the prior written consent of Company; provided, however, on condition that the Franchise

Source: Item 22 — CONTRACTS (FDD page 54)

Question 22

According to the Angry Chickz franchise agreement, what is the deadline for submitting the Gross Sales report if the company designates a fiscal period other than a calendar month?

Accepted Answer

- 10.1.2 On or before the 20th day following each calendar month or other fiscal period designated by Company, Franchisee shall submit a Gross Sales report prescribed by Company, which shall be certified by an officer of Franchisee to be accurate and complete, reporting all Gross Sales for the preceding calendar month or other fiscal period designated by Company, as applicable, together with such additional financial information as Company may request, including cost of goods sold, labor costs, customer information, sales by day-part, sales by customer type.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 23

According to Illinois law, what type of forum selection clause is void in an Angry Chickz franchise agreement?

Accepted Answer

- 3. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 24

According to the Virginia addendum, what effect do statements signed by an Angry Chickz franchisee have on waiving claims under state franchise law?

Accepted Answer

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 25

According to the Virginia addendum, when is the Angry Chickz Franchise Agreement valid and enforceable?

Accepted Answer

ia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.

### 2. **Item 22, Additional Disclosure.** The following statement is added to Item 22:

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

3. Payment of all initial fees payable under the Franchise Agreement is deferred until Franchisor has satisfied its pre-opening obligations to you under the Franchise Agreement and your Angry Chickz business opens to the public.

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC FRANCHISE AGREEMENT (State of Virginia)**

|                                                                              | THIS ADDENDUM is entered into as of, 20 between ANGRY CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and , a ("Franchisee"), with reference to the                                                                                                                                                                                                                                                                                                     |
|------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| following: |  |
| and/or (C) the franchised business will be located in the State of Virginia. | The provisions of this Addendum form an integral part of, and are incorporated into, the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to you was made in the State of Virginia; (B) you are a resident of the State of Virginia; |
| 1. the public.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 26

According to the Washington Addendum, what conditions must be met for an Angry Chickz franchisee to bring an action or proceeding in Washington?

Accepted Answer

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 27

According to Washington law, can an Angry Chickz franchisee waive their right to a jury trial?

Accepted Answer

Statute of Limitations and Waiver of Jury Trial.** Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 28

What agreement remains valid and enforceable between the parties, except as set forth in the Angry Chickz addendum?

Accepted Answer

|                                                                   | THIS ADDENDUM is entered into as of, 20 between ANGRY                                                                                                                                                                                                                                         |
|-------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and , a ("Franchisee"), with reference to the |
| following: |  |
| 1. | Payment of all initial fees payable under the Franchise Agreement is deferred until |
| and Franchisee's Angry Chickz business opens to the public. | Franchisor has satisfied its pre-opening obligations to Franchisee under the Franchise Agreement |
| 2. opens to the public. | Notwithstanding anything to the contrary set forth in the Franchise Agreement, and in particular Section 5.1 thereof, Franchisee shall pay the Initial Franchise Fee to Company when Company has fulfilled its initial obligations to Franchisee and Franchisee's Angry Chickz business |
| 3. | Except as set forth herein, the Franchise Agreement shall be valid and enforceable |
| between the parties in accordance with its terms. |

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 29

How does the Area Development Agreement fee work with the initial franchise fees for Angry Chickz?

Accepted Answer

may pay to third parties are refundable.

As described in Item 5, if you sign an Area Development Agreement, you must pay us an initial development fee equal to \$25,000 multiplied by the number of Angry Chickz Restaurants (excluding the first Restaurant, at a minimum of 2 restaurants) which you must open, plus \$50,000 representing the initial franchise fee for your first Franchise Agreement. When we accept the site for each Restaurant, you will sign a separate Franchise Agreement and pay us an initial franchise fee of \$50,000. However, we will credit the development fee against the initial franchise fees (at the rate of \$50,000 for the first restaurant and \$25,000 for each subsequent restauran

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–18)

Question 30

In California, when does an Angry Chickz developer pay the development fee for each Angry Chickz business?

Accepted Answer

In the State of California, Angry Chickz will defer the payment of the development fee attributed to each Angry Chickz business that Developer agrees to develop under this Agreement until that Angry Chickz business opens for business. Upon the opening of each Angry

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 31

For California franchisees who sign a development agreement with Angry Chickz, when is the payment of the development and initial fees due for each specific unit?

Accepted Answer

7. The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 32

What conditions must be met for the compensation requirement to apply when Angry Chickz refuses to renew a franchise in Michigan?

Accepted Answer

- (d) A provision that permits a Franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration, of the franchisee's inventory, supplies, equipment, fixtures, and furnishings.

Personalized materials which have no value to the Franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation.

This subsection applies only if: (i) the term of the franchise is less than 5 years; and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of Franchisor's intent not to renew the franchise.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 33

What conditions must be met before an Angry Chickz franchisee can open and operate the Franchised Business?

Accepted Answer

- 5.4.1 Franchisee shall not open the Franchised Business to the public until: (a) Franchisee has properly developed and equipped the Franchised Business in accordance with the Standards and Applicable Law; (b) all pre-opening training for Franchisee's personnel has been completed; (c) Franchisee has obtained all Permits to operate the Franchised Business; and (d) Company has provided Franchisee with its written authorization to open and commence operation of the Franchised Business. Company's authorization to open the Franchised Business is to confirm that Franchisee complies with the Standards, and shall not be construed as an express or implied representation or warranty that the Location complies with Applicable Law or that the construction is sound or free from defects. The date that Franchisee opens and commences operation of the Franchised Business is the opening date ("**Opening Date**") and Company may insert that Date in attached Exhibit F.
- 5.4.2 Subject only to Force Majeure, Franchisee shall complete construction or renovation of the Premises and the Franchised Business, obtain all required Permits and Company's written authorization to open, and commence operation of the Franchised Business as soon as possible, but in any event not later than 10 months following the Effective Date, unless Company consents in writing to a longer period of time. The time periods for the commencement and completion

Source: Item 22 — CONTRACTS (FDD page 54)

Question 34

What conditions must be met for a general release to be valid for an Angry Chickz franchise in Washington?

Accepted Answer

- **13.

Applicability.** This General Release does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, or the rules adopted thereunder; and the Maryland Franchise Registration and Disclosure Law, Md.

Code Ann., Bus.

Reg. §§14-201 – 14-233, or the rules adopted thereunder.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 35

What conditions must be met for a release or waiver of rights to be valid for an Angry Chickz franchise in Washington?

Accepted Answer

- **4.

General Release.** A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).

In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 36

What conditions necessitate the execution of the Angry Chickz Franchise Agreement Addendum in North Dakota?

Accepted Answer

- **1.** The provisions of this Addendum form an integral part of, and are incorporated into, the Franchise Agreement. This Addendum is being executed because: **(A)** the offer or sale of a franchise to you was made in the State of North Dakota; **(B)** you are a resident of the State of North Dakota; and/or **(C)** the franchised business will be located in the State of North Dakota.
- **2.** The North Dakota Securities Commissioner has held the following to be unfair, unjust, or inequitable to North Dakota franchisees (Section 51-19-09, N.D.C.C.):
  - A. Restrictive Covenants: Franchise disclosure documents which disclose the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C., without further disclosing that such covenants will be subject to this statute.
  - B. Situs of Arbitration Proceedings: Franchise agreements providing that the parties must agree to arbitrate disputes at a location that is remote from the site of the franchisee's business.
  - C. Restriction on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
  - D. Liquidated Damages and Termination Penalties: Requiring North Dakota franchisees to consent to liquidated damages or termination penalties.
  - E. Applicable Laws: Franchise agreements which specify that any claims arising under the North Dakota franchise law will be governed by the laws of a state other than North Dakota.
  - F. Waiver of Trial by Jury: Requiring North Dakota franchisees to consent to the waiver of a trial by jury.
  - G. Waiver of Exemplary and Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages.
  - H. General Release: Requiring North Dakota franchisees to execute a general release of claims as a condition of renewal or transfer of a franchise.
  - I. Limitation of Claims: Requiring that North Dakota franchisees to consent to a limitation of claims. The statute of limitations under North Dakota law applies.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 37

What conditions trigger the need for the Angry Chickz Addendum to the Area Development Agreement in New York?

Accepted Answer

- 1. Irrespective of any requirements for the area developer to renew or extend the Area Development Agreement and any conditions that must be met for the franchisor to approve a transfer of the franchise, to the extent required by applicable law, all rights the area developer enjoys and any causes of action arising in the area developer's favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
- 2. The area developer may terminate the Area Development Agreement on any grounds available by law.
- 3. Irrespective of any rights granted to the franchisor to assign the Area Development Agreement, no assignment will be made except to an assignee who in good faith and judgment of the franchisor, is willing and financially able to assume the franchisor's obligations under the Area Development Agreement.
- 4. No choice of law or choice of forum provision in the Area Development Agreement should be considered a waiver of any right conferred upon the franchisor or upon the area developer by Article 33 of the General Business Law of the State of New York.
- 5. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in the Development Agreement.
- 6. Except as expressly modified by this Addendum, the Development Agreement remains unmodified and in full force and effect.
- 7. This Addendum may be executed in multiple counterparts, each of which when executed and delivered shall be deemed an original and all of which together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Addendum by electronic transmission (including an electronic signature platform or the transmission of a scanned PDF document) shall be as effective as delivery of a manually executed counterpart of this Addendum.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 38

What is the consequence if an Angry Chickz franchisee commits more than three material defaults during the 36-month period prior to renewal?

Accepted Answer

isions of the franchise and related agreements**. **You should read these provisions in the agreements attached to this disclosure document**.

| Provision                                               | Section in Franchise Agreement | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a. Length of the | § 3.1 | 10 years |
| franchise term |  |  |
| b. Renewal or | § 3.2 | 2 successive 5-year periods |
| extension of the |  |  |
| term |  |  |
| c. Requirements for franchisee to renew or extend | §§ 3.2 – 3.4                      | We use the term "renewal" to refer to extending our franchise relationship at the end of your initial term (and any other renewal or extension of the initial term). You may be asked to sign a contract with materially different terms and conditions than your original contract. You must: (1) pay the successor agreement fee; (2) have complied with your obligations during the term of your Franchise Agreement; (3) have delivered a notice between 9 and 12 months before the expiration of the Term; (4) execute a new franchise agreement which may contain materially different terms and conditions from your original contract; (5) must have undertaken and completed at your expense the remodeling, renovation and refurbishment of your Angry Chickz Restaurant, unless you have remodeled your business within the preceding 5 years; (6) sign a general release; (7) not have committed three or more material defaults during prior 36 month period and (8) you or your employees, as applicable, must have complied with our then-current qualification, training and certification requirements, at your expense. |
| d. Termination by | Not applicable | Subject to state law.

Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 39–48)

Question 39

In the context of an Angry Chickz franchise assignment, what happens if the transferee/assignee chooses to assume the existing agreement?

Accepted Answer

- (j) that the transferee/assignee shall have agreed, under a written assumption agreement approved by Company, that at closing, the transferee/assignee shall, at Company's option, either (a) assume this Agreement; provided however, that such assumption shall not relieve Franchisee (as transferor/assignor) of any continuing obligations; or (b) execute a replacement franchise or license agreement on the then-current form of franchise agreement used by Company in the State in which the Franchised Business is being operated, provided, however, that the term of the replacement franchise or license agreement shall be, at Company's option, the remaining term of this Agreement, unless Company otherwise agrees; and, at Company's request, the transferor/assignor shall have executed a continuing guaranty in favor of Company of the performance and payment by the transferee/assignee of all obligations and debts to Company and its Affiliates under the replacement franchise or license agreement;

Source: Item 22 — CONTRACTS (FDD page 54)

Question 40

How does Angry Chickz credit the development fee against the initial franchise fees for each restaurant under an Area Development Agreement?

Accepted Answer

may pay to third parties are refundable.

As described in Item 5, if you sign an Area Development Agreement, you must pay us an initial development fee equal to \$25,000 multiplied by the number of Angry Chickz Restaurants (excluding the first Restaurant, at a minimum of 2 restaurants) which you must open, plus \$50,000 representing the initial franchise fee for your first Franchise Agreement. When we accept the site for each Restaurant, you will sign a separate Franchise Agreement and pay us an initial franchise fee of \$50,000. However, we will credit the development fee against the initial franchise fees (at the rate of \$50,000 for the first restaurant and \$25,000 for each subsequent restauran

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–18)

Question 41

How does Angry Chickz credit the development fee against the initial franchise fees for each restaurant under the Area Development Agreement?

Accepted Answer

chise fee for your first Franchise Agreement.

When we accept the site for each Restaurant, you will sign a separate Franchise Agreement and pay us an initial franchise fee of \$50,000 for each required Restaurant. We will credit the development fee against the initial franchise fees (at the rate of \$50,000 for the first restaurant and \$25,000 each additional Restaurant until the development fee is exhausted).

If you signed a form of Area Development Agreement which differs from our current form, your initial franchise fees may be determined in ac

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–18)

Question 42

What is the deadline for an Angry Chickz developer to submit a proposed lease or purchase agreement after receiving site acceptance?

Accepted Answer

- 6.2.1 Promptly following Developer's receipt of Company's acceptance, Developer shall proceed to negotiate a lease or purchase agreement for the site and shall submit to Company a copy of the proposed lease or purchase agreement, as applicable.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 43

As of December 31, 2024, what was the minimum length of time an Angry Chickz affiliate-owned location needed to be open to be included in the 2024 gross sales data?

Accepted Answer

Table 1 includes actual historical gross sales for the twenty-four (24) affiliate owned locations that were open for twelve (12) months or longer as of December 31, 2024. The Gross Sales are for the period

January 1, 2024 to December 31, 2024. The three (3) affiliated owned locations that began operations during the calendar year 2024 were not included; no other affiliate owned locations are excluded. The date when each location opened and the square footage is included in Table 1.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)

Question 44

Does the definition of 'Assets' in the Angry Chickz Franchise Agreement include intellectual property derived from and created in connection with the Franchised Business?

Accepted Answer

"**Assets**" means all of the following personal property and assets owned by Franchisee or in which Franchisee otherwise has any rights, and located at, or used in connection with the Franchised Business: (a) all accounts, licenses, permits, and contract rights, including this Agreement, leasehold interests, all telephone and telecopier numbers, telephone and other directory listings, websites, email addresses, social media and other electronic accounts, profiles and listings associated with the Franchised Business, intellectual property derived from and created in connection with the Franchised Business (to the extent not assigned to Company), general intangibles, receivables, claims of Franchisee, all guaranties and security therefor and all of Franchisee's right, title and interest in the goods purchased and represented by any of the foregoing; (b) all chattel paper including electronic chattel paper and tangible chattel paper; (c) all

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 45

What is the dependency between completing the Initial Training Program and opening an Angry Chickz franchise?

Accepted Answer

- 6.1.3 Franchisee may not open and operate the Franchised Business until (i) the Operating Principal shall have completed the Initial Training Program to Company's reasonable satisfaction; (ii) Franchisee's initial Restaurant Leader shall have completed the Initial Training Program to Company's reasonable satisfaction or, if this Agreement relates to Franchisee's or its Affiliates third or subsequent Restaurant, the Trainer has trained the such manager in accordance with the Manual(s); and (iii) Franchisee has successfully trained a number of employees reasonably necessary to operate the Franchised Business in accordance with the Manual(s).

Source: Item 22 — CONTRACTS (FDD page 54)

Question 46

What is the dependency between exercising the Successor Agreement Right and the obligation to refurbish for an Angry Chickz franchisee?

Accepted Answer

- 5.5.2 In addition to Franchisee's obligations under Section 5.5.1, but not more frequently than once every five (5) years during the Term, and as a condition to Franchisee's exercising its Successor Agreement Right, Company may require Franchisee, at Franchisee's sole cost and expense, to refurbish, remodel and improve the Franchised Business to conform to the then-current Standards for new Restaurants.

Such remodeling may include structural changes to the Franchised Business and replacement or modification of FFE, décor, and trade dress as well as such other changes as Company may direct.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 47

What is the dependency regarding the operation of the Franchised Business in conformity with the Angry Chickz franchise agreement?

Accepted Answer

7.1 **Compliance with Standards and Applicable Law**. Franchisee acknowledges and agrees that operating and maintaining the Franchised Business according to the System and Standards are essential to preserve the goodwill of the Marks and all Restaurants. Therefore, Franchisee shall comply in the System and operate the Franchised Business in strict compliance with the Standards and Manual(s). The Standards and the Manuals(s) may regulate any or all aspects of the operation and maintenance of the Franchised Business. Without limiting the foregoing, Franchisee shall operate the Franchised Business as a clean, orderly, lawful and respectable place of business in accordance with the Standards and in accordance with Applicable Law. Franchisee shall not knowingly cause or allow any part of its Franchised Business to be used for any immoral or illegal purpose. Franchisee at all times shall provide high quality and professional, prompt, courteous, and efficient goods and services to customers and at all times at professionally and courteous to members of the public. Without limiting its other rights, Company may, in its sole discretion, contract with a third party to conduct sanitation and food safety audits of the Franchised Business periodically throughout the Term, but no less than once per calendar year. Franchisee shall reimburse Company for the cost of such sanitation and food safety audits. Franchisee will conform to the highest standards of honesty, integrity, fair dealing and ethical conduct. Franchisee shall not engage in any action which will cause Company to be in violation of any Applicable Law. Franchisee shall refrain from engaging in action (or failing to take any action), which in the reasonable opinion of Company, causes or could cause damage, harm or injury to the Marks, and/or System.

### 7.2 **Operating Principal and Management Employees**.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 48

What is the dependency between site acceptance and lease negotiation for an Angry Chickz franchise?

Accepted Answer

n locating an acceptable site for a Dine-In Restaurant, neither Company's said assistance, if any, nor its acceptance of any proposed site, whether initially proposed by Developer or by Company, shall be construed to insure or guarantee the profitable or successful operation of the Restaurant at that site by Developer, and Company hereby expressly disclaims any responsibility therefor. Developer acknowledges its sole responsibility for finding each site for the Dine-In Restaurants it develops pursuant to this Agreement.
- 6.2 Delivery of Franchise Disclosure Document, Execution of Lease and Franchise Agreement.
- 6.2.1 Promptly following Developer's receipt of Company's acceptance, Developer shall proceed to negotiate a lease or purchase agreement for the site and shall submit to Company a copy of the proposed lease or purchase agreement, as applicable. Following Company's receipt of the proposed lease or purchase agreement, as applicable, which meets Company's requirements, Company shall notify Developer of its acceptance or rejection of the proposed lease or purchase agreement, as applicable.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 49

What is the effect of the Angry Chickz Addendum on conflicting provisions in the Development Agreement?

Accepted Answer

- 5. In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act **or any other law of Illinois** is void.
- 6. No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
- 7. Construction. In all other respects, the Area Development Agreement will be construed and enforced in accordance with its terms.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 50

What is the effect of the Washington Franchise Investment Protection Act on provisions in the Angry Chickz Development Agreement?

Accepted Answer

[Item 23: RECEIPTS]

- **1.

Background**.

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Development Agreement regardless of anything to the contrary contained therein.

This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

- **2.

Conflict of Laws.** In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.

- **3.

Franchisee Bill of Rights.** RCW 19.100.180 may supersede provisions in the Development Agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise.

There may also be court decisions that supersede the Development Agreement or related agreements concerning your relationship with the franchisor.

Development agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.

- **4.

Site of Arbitration, Mediation, and/or Litigation.** In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.

In addition, if litigation is not precluded by the Development Agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

- **5.

General Release.** A release or waiver of rights in the Development Agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 51

What is the effect of the Washington Franchise Investment Protection Act on provisions in the Angry Chickz Franchise Agreement that permit the franchisor to repurchase the franchisee's business?

Accepted Answer

- **8.

Certain Buy-Back Provisions.** Provisions in franchise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 52

In the event of a conflict between the Area Development Agreement and the Minnesota Addendum, which terms prevail for an Angry Chickz franchise?

Accepted Answer

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC AREA DEVELOPMENT AGREEMENT**

**(State of Minnesota)**

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 53

What factors determine the location of arbitration for an Angry Chickz franchise dispute in Washington?

Accepted Answer

Site of Arbitration, Mediation, and/or Litigation.** In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 54

Can the Angry Chickz franchise agreement prevent a franchisee from seeking treble damages in Washington?

Accepted Answer

Waiver of Exemplary & Punitive Damages.** RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.

Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 55

Does the Angry Chickz franchise agreement require North Dakota franchisees to pay all costs and expenses incurred by the franchisor in enforcing the agreement, and if so, what exception applies according to the North Dakota Securities Commissioner?

Accepted Answer

The North Dakota Securities Commissioner has held the following to be unfair, unjust, or inequitable to North Dakota franchisees (Section 51-19-09, N.D.C.C.):

- J. Enforcement of Agreement: Requiring that North Dakota franchisees to pay all costs and expenses incurred by the franchisor in enforcing the agreement. The prevailing party in any enforcement action is entitled to recover all costs and expenses including attorney's fees.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 56

Does the Angry Chickz franchise agreement specify any conditions under which the automatic termination provisions would not apply due to Applicable Laws?

Accepted Answer

d holders shall reexecute a written guaranty in a form prescribed by Company.

### **ARTICLE 14 DEFAULT AND TERMINATION**

- 14.1 **General**. Company shall have the right to terminate this Agreement only for "cause". "**Cause**" is hereby defined as a default of this Agreement. Company shall exercise its right to terminate this Agreement in the following circumstances and manners.
- 14.2 **Automatic Termination Without Notice**. Subject to Applicable Laws of the jurisdiction in which the Franchised Business is operated to the contrary, Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall at Company's election automatically terminate without notice to Franchisee if: (i) Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any contrary provisions of Applicable Law), shall admit to its inability to meet its financial obligations as they become due, or shall make a disposition for the benefit of its creditors; (ii) a judgment against Franchisee in the amount of more than \$25,000 remains unsatisfied for a period of more than 30 days (unless an appeal bond has been filed); (iii) the Franchised Business, the Premises, or any of the Assets are seized, taken over or foreclosed by a government official in the exercise of its duties, or seized, taken over, or foreclosed by a creditor or lienholder provided that a final judgment against the Franchisee remains unsatisfied for 30 days (unless an appeal bond has been filed); (iv) a levy of execution or attachment has been made upon the license granted by this Agreement or upon any of the Assets, and it is not discharged within 5 days of such levy or attachment; (v) Franchisee permits any recordation of a notice of mechanics lien against the Franchised Business or any equipment at the Franchised Business which is not released within 60 days, or if any person commences any action to foreclose on the Franchised Business or said equipment; (vi) Franchisee allows or permits any judgment to be entered against Company or any of its Affiliates, arising out of or relating to the operation of the Franchised Business; or (vii) a condemnation or transfer in lieu of condemnation has occurred.
- 14.3 **Option to Terminate Without Opportunity to Cure**.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 57

For an Angry Chickz franchise, what condition must be met before initial fees are due?

Accepted Answer

[Item 23: RECEIPTS]

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC DISCLOSURE DOCUMENT FOR THE STATE OF ILLINOIS**

- 1. Payment of all initial fees payable under the Franchise Agreement and/or Area Development Agreement is deferred until Franchisor has satisfied its pre-opening obligations to you under the Franchise Agreement and/or Area Development Agreement and your Angry Chickz business opens to the public. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition.
- 2. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
- 3. Illinois law shall apply to and govern the Franchise Agreement and Area Development Agreement.
- 4. **Item 17, Additional Disclosure.** The following statements are added to Item 17:

Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.

In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act **or any other law of Illinois** is void.

5. **Item 22, Additional Disclosure.** The following statement is added to Item 22:

No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

By reading this Disclosure Document, you are not agreeing to, acknowledging, or making any representations whatsoever to the Franchisor and its affiliates.

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC FRANCHISE AGREEMENT**

**(State of Illinois)**

---

[Item 23: RECEIPTS]

7. The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC FRANCHISE AGREEMENT**

**(State of California)**

---

|                                                                                                                                                                                                | THIS ADDENDUM is entered into as of, 20 between ANGRY                                                |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|--|
|  | CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and , a ("Franchisee"), with reference to the |  |
| following: |  |  |
|  | The provisions of this Addendum form an integral part of, and are incorporated into, the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to you was made in the State of Virginia; (B) you are a resident of the State of Virginia; |  |
| and/or (C) the franchised business will be located in the State of Virginia. |  |  |
|  |  |  |
| 1. | Payment of all initial fees payable under the Area Development Agreement is deferred |  |
| until Franchisor has satisfied its pre-opening obligations to you under the Area Development |  |
| Agreement and your first Angry Chickz business opens to the public. |  |  |
| 2. | No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in |  |
|  |  |  |
| connection with the commencement of the franchise relationship shall have the effect of (i) |  |
| waiving any claims under any applicable state franchise law, including fraud in the inducement, | or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any |  |
| document executed in connection with the franchise. |  |
|  | Except as set forth herein, the Area Development Agreement shall be valid and enforceable |  |
| between the parties in accordance with its terms. |  |
|  | IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this Addendum |  |
| as of the Effective Date identified below. |  |
| "Company" | "Developer" |  |
|  |  |  |
| ANGRY CHICKZ FRANCHISING LLC, | , |  |
| a California limited liability company | [ ] an individual [ ] a general partnership; [ ] a limited partnership; |  |
| By: | [ ] a limited liability company; |  |
| Name: | [ ] a corporation; |  |
| Its: | By: |  |
| Date of signing: | Name: Its: Date of signing: |  |

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 58

How does the Angry Chickz Franchise Disclosure Document state that the Addendum affects the original Franchise Agreement?

Accepted Answer

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 59

For an Angry Chickz franchise, when are the initial fees payable under the Franchise Agreement due?

Accepted Answer

edgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

The name and address of the Franchisor's agent in this state authorized to receive service of process is: Commissioner of Securities, Department of Commerce and Consumer Affairs, Business Registration Division, Securities Compliance Branch, 335 Merchant Street, Room 203, Honolulu, Hawaii 96813.

### **ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC DISCLOSURE DOCUMENT FOR THE STATE OF ILLINOIS**

- 1. Payment of all initial fees payable under the Franchise Agreement and/or Area Development Agreement is deferred until Franchisor has satisfied its pre-opening obligations to you under the Franchise Agreement and/or Area Development Agreement and your Angry Chickz business opens to the public. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition.
- 2. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
- 3. Illinois law shall apply to and govern the Franchise Agreement and Area Development Agreement.
- 4.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 60

For an Angry Chickz franchise in Minnesota, what law takes precedence in the event of a conflict between the addendum and the franchise agreement?

Accepted Answer

### **2. Choice of Forum and Law; Waiver of Right to Jury Trial or Termination Penalties.** The following statements are added to Item 17:

Minnesota Statute 80C.21 and Minnesota Rule 2860.4400(J) prohibit the Franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce (1) any of the franchisee's rights as provided for in Minnesota Statute 80C or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.

The franchisee cannot consent to the Franchisor obtaining injunctive relief. The Franchisor may seek injunctive relief. See Minnesota Rule 2860.4400(J). Also, a court will determine if a bond is required.

The Limitations of Claims section must comply with Minnesota Statute 80C.17 Subd. 5.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 61

Why are franchised stores not included in the gross sales information provided for Angry Chickz?

Accepted Answer

No franchised stores are included because our first franchised store opened in calendar year 2024 and we do not have adequate data to include for that store.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)

Question 62

Can an Angry Chickz franchisee bring an action in Washington related to the sale of franchises or a violation of the Washington Franchise Investment Protection Act?

Accepted Answer

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

Source: Item 23 — RECEIPTS (FDD pages 54–260)

Question 63

Can an Angry Chickz franchisee deduct commission fees paid to third-party marketplaces from gross sales when calculating the Continuing Royalty?

Accepted Answer

- 4.2 **Continuing Royalty**.

Franchisee shall pay to Company, a continuing royalty (the "**Continuing Royalty**") equal to 6% of Franchisee's Gross Sales during the preceding Accounting Period, subject to Section 4.8.2.

As of the Effective Date, it is Company's policy that Company does not collect a Continuing Royalty or Brand Fee on commissions paid to third party marketplaces that Company authorizes Franchisee to use.

To that end, to the extent included in "Gross Sales," Company will permit Franchisee to deduct from "Gross Sales" 100% of the commission fees paid by Franchisee to third-party marketplace services that Company authorizes Franchisee to use.

Company may end this policy at any time and will begin to collect Continuing Royalty on such commissions upon 6 months prior notice to Franchisee.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 64

Can an Angry Chickz franchisee modify the design, construction, equipping, and improvement standards for the premises and franchised business?

Accepted Answer

- 5.3.1 Franchisee is responsible for developing and constructing the Franchised Business at its expense. Before the renovation and construction of the Franchised Business or the Location, Company shall provide Franchisee with copies of Company's Standards for the design and layout of a typical Restaurant and mandatory items of FFE and other suggested items of FFE, decor, trade dress, inventory, Information Systems, telephone systems, and other items. Company or its Affiliate may, but is not obligated to, to also provide Franchisee advice and assistance regarding the design and layout of the Franchised Business. Franchisee shall at its sole cost and expense promptly and diligently cause the Premises and Franchised Business to be designed, constructed, equipped and improved in accordance with the Standards, unless Company agrees to modifications in writing.
- 5.3.2 Franchisee shall only employ licensed and bonded architects, engineers and general contractors, that have been approved by Company, to prepare all architectural, engineering and construction drawings and site plans, and to obtain all Permits required to construct, remodel, renovate, and/or equip the Franchised Business and Premises in accordance with the Standards and

Applicable Law. Franchisee acknowledges that Standards (including layouts) provided by Company may not comply with Applicable Law and it is Franchisee's responsibility to modify the Standards (including layouts) to comply with Applicable Law, subject to Company's acceptance as provided below. All drawings and plans shall be submitted to Company for its prior review and acceptance before Franchisee's commencement of construction. All drawings and plans shall be submitted to Company with a construction and build-out calendar reflecting that the construction and development of the Franchised Business will be completed within the time periods required by this Agreement. If Company does not deliver written notice that Company accepts or rejects such plans or drawings within 10 days, the plans or drawings shall be deemed rejected.

Source: Item 22 — CONTRACTS (FDD page 54)

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