What activities must the Subsidiary's organizational documents confine themselves to when an Angry Chickz developer assigns a Franchise Agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2.2 Notwithstanding Section 7.2.1, Developer may, with Company's prior written consent, execute and contemporaneously assign a Franchise Agreement executed pursuant hereto to a separate Entity controlled by Developer (each a "Subsidiary"); provided and on condition that:
- (b) The Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, and partnership agreement, as applicable, shall provide that its activities are confined exclusively to operating Restaurant;
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, when a developer assigns a Franchise Agreement to a separate entity (Subsidiary) they control, the Subsidiary's organizational documents must stipulate that its activities are exclusively limited to operating an Angry Chickz Restaurant. This requirement is part of the conditions that Angry Chickz sets for allowing a developer to assign a Franchise Agreement to a Subsidiary.
This provision ensures that the Subsidiary remains focused solely on the operation of the Angry Chickz restaurant and does not engage in other business activities that could potentially distract from or negatively impact the brand. By restricting the Subsidiary's activities, Angry Chickz aims to maintain consistency and quality across all franchised locations.
For a prospective Angry Chickz franchisee, this means that if they plan to assign their Franchise Agreement to a Subsidiary, the organizational documents of that Subsidiary (such as articles of incorporation, bylaws, or operating agreements) must explicitly state that its sole purpose is to operate the Angry Chickz restaurant. Failure to comply with this requirement could prevent the assignment from being approved by Angry Chickz.
This requirement is in place to protect the Angry Chickz brand and ensure that all franchisees, even those operating through Subsidiaries, are fully dedicated to the success of their Angry Chickz restaurants. It also allows Angry Chickz to maintain a clear understanding of the ownership and operational structure of each franchise location.