What is a condition precedent to exercising the Successor Agreement Right for an Angry Chickz franchise?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.4 Conditions Precedent to Entering into a Successor Franchise Agreement.
Franchisee's Successor Agreement Right is conditioned upon the fulfillment of each and all of the following conditions precedent:
3.4.1 At the time Franchisee delivers its Notice of Election to Company, Company is then-offering franchises in the state where the Location is located.
3.4.2 At the time Franchisee delivers its Notice of Election to Company, and at all times thereafter until the commencement of the Successor Term, Franchisee shall not have been, nor be, in default of its material obligations under this Agreement.
3.4.3 At Company's request, Franchisee shall, prior to the date of commencement of the Successor Term, have undertaken and completed at its expense, the remodeling, renovation, modernization, or refurbishing of the Premises and the Franchised Business, which may include installation of new or replacement FFE to comply with the Standards for new Restaurants.
3.4.4 Without limiting the generality of Section 3.4.1, Franchisee shall not have committed 3 or more material defaults of this Agreement during the prior 36 month period during the Term for which Company shall have delivered notices of default, whether or not such defaults were cured.
3.4.5 Franchisee, and Franchisee's employees, as applicable, shall comply with Company's then-current qualification, training and certification requirements at Franchisee's expense.
3.4.6 Concurrently with the execution of the Successor Franchise Agreement, Franchisee shall, and shall cause each of its Affiliates and owners / guarantors to, execute and deliver to Company a general release, on a form prescribed by Company of any and all known and unknown claims against Company and its Affiliates and their Owners, officers, directors, agents, and employees.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, a franchisee's right to enter into a Successor Franchise Agreement is contingent upon meeting specific conditions. One such condition is that at the time the franchisee delivers their Notice of Election to Angry Chickz, Angry Chickz must be offering franchises in the state where the restaurant location is situated. This means that if Angry Chickz has ceased offering franchises in that particular state, the franchisee's right to renew their agreement may be jeopardized.
Another critical condition is that the franchisee must not be in default of their material obligations under the existing franchise agreement, both when they submit their Notice of Election and throughout the period leading up to the commencement of the Successor Term. Furthermore, Angry Chickz may require the franchisee to remodel, renovate, modernize, or refurbish the premises at the franchisee's expense to comply with the standards for new restaurants before the Successor Term begins, potentially including the installation of new or replacement fixtures, furniture, and equipment (FFE).
Additionally, the franchisee must not have committed three or more material defaults of the Agreement during the 36-month period preceding the Notice of Election, even if those defaults were cured. The franchisee and their employees must also meet Angry Chickz's then-current qualification, training, and certification requirements at their own expense. Finally, upon executing the Successor Franchise Agreement, the franchisee must provide a general release to Angry Chickz, its affiliates, owners, officers, directors, agents, and employees, absolving them of any known or unknown claims.
These conditions precedent highlight the importance of maintaining a strong, compliant relationship with Angry Chickz throughout the term of the franchise agreement. Failure to meet any of these conditions could result in the loss of the franchisee's right to renew their franchise, making it essential for prospective franchisees to understand and adhere to these requirements.