Does the Angry Chickz Area Development Agreement require the Developer to protect the Company?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
1.3 Territorial Rights
- 1.3.1 During the Term of this Agreement, neither Company nor its Affiliates shall operate or grant a license or franchise to any other person or Entity to operate a Dine-In Restaurant within the Development Area, provided, that Developer is in compliance with the terms of this Agreement.
- 1.3.2 Company expressly reserves all other rights, including the exclusive, unrestricted right, in its discretion, directly and indirectly, itself and through its employees, Affiliates, representatives, licensees, franchisees, assigns, agents and others:
- (a) to develop, own and/or operate and to franchise or license others to own and/or operate (i) Restaurants, the physical location of which are located outside of the Development Area, regardless of proximity to the Development Area, (ii) businesses that provide goods and services within and outside of the Development Area, regardless of proximity to the Development Area under names other than "Angry Chickz," (iii) Restaurants and other businesses at Non-Traditional Venues within or outside the Development Area, and regardless of their proximity to any Restaurant developed or under development or consideration by Developer; and (iv) businesses operating under names other than under the Marks at any location, and of any type whatsoever, regardless of their proximity to the Development Area and whether or not such businesses use any portion of the System, offer similar products or services or compete with Restaurants.
- (b) to offer, sell, provide, produce, license, distribute and market products and services identified by the Marks and/or other trademarks or service marks to any person or Entity, at or through any location or outlet (other than Restaurants, the physical premises of which are located within the Development Area, except for Restaurants located at Non-
Traditional Venues), regardless of proximity to the Development Area, and through any distribution channel, at wholesale or retail, including by means of catering, the internet or internet web site mobile application, online food and beverage ordering, third-party food and beverage delivery services, food trucks or other non-fixed locations, mail order catalogs, direct mail advertising, and other distribution methods, including websites, online retailers, and direct sales through affiliates;
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz FDD, the Area Development Agreement includes terms that protect the company's territorial rights. Specifically, Angry Chickz agrees not to operate or franchise another dine-in restaurant within the developer's designated area, as long as the developer complies with the agreement. This provision ensures that the developer has a protected territory for dine-in restaurants under the Angry Chickz brand. However, this protection is not absolute.
Angry Chickz retains significant rights outside of this protected territory. The company can operate or franchise restaurants outside the development area, regardless of proximity. They can also develop businesses offering goods and services under different names, even within the developer's area. Additionally, Angry Chickz can operate restaurants and other businesses at non-traditional venues, such as airports or stadiums, both inside and outside the development area. These reserved rights allow Angry Chickz to pursue various business opportunities without being restricted by the developer's territory, except for traditional dine-in restaurants operating under the Angry Chickz name.
Furthermore, Angry Chickz maintains the right to distribute products and services identified by their trademarks through various channels, including catering, the internet, mobile applications, and third-party delivery services. This means that while the developer has exclusive rights to operate dine-in Angry Chickz restaurants within their territory, the company can still market and sell its products through other avenues, potentially competing with the developer's business. This comprehensive reservation of rights ensures that Angry Chickz can adapt to changing market conditions and pursue new revenue streams without infringing on the developer's core business of dine-in restaurants within the specified area.