What activities are considered Competitive Activities that are prohibited by the Angry Chickz non-compete agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
"Competitive Activities" means to, own, operate, lend to, advise, be employed by, or have any financial interest in (i) any restaurant 25% or more of whose gross sales is derived from the sale of boneless breaded chicken, other than a Restaurant operated pursuant to a validly subsisting Franchise Agreement with Company, or (ii) any business that specializes in developing, owning, operating or franchising restaurants 25% or more of whose gross sales is derived from the sale of boneless breaded chicken, or (iii) any business engaged in the preparation, production or sale, at wholesale, of any boneless breaded chicken food products. Notwithstanding the foregoing, "Competitive Activities" shall not include the direct or indirect ownership solely as an investment, of securities of any Entity which are traded on any national securities exchange if applicable owner thereof (i) is not a controlling person of, or a member of a group which controls, such Entity and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Entity.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, Competitive Activities are specifically defined in relation to boneless breaded chicken. The non-compete agreement prohibits a franchisee from owning, operating, lending to, advising, being employed by, or having any financial interest in certain businesses.
These prohibited businesses include any restaurant deriving 25% or more of its gross sales from boneless breaded chicken, unless it's an Angry Chickz franchise. It also includes any business specializing in developing, owning, operating, or franchising restaurants with 25% or more of their gross sales from boneless breaded chicken. Furthermore, any business engaged in the wholesale preparation, production, or sale of boneless breaded chicken food products is considered a Competitive Activity.
However, there is an exception: owning securities of a publicly traded entity is not considered a Competitive Activity if the owner is not a controlling person or part of a controlling group, and owns less than 5% of any class of the entity's securities. This exception allows franchisees to invest in publicly traded companies, even those involved with boneless breaded chicken, as long as their investment remains passive and below the specified ownership threshold. This definition provides clarity on what Angry Chickz considers a competitive threat and what activities a franchisee must avoid to comply with the non-compete agreement.