What constitutes 'good cause' for Angry Chickz to refuse a franchise transfer in Michigan?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a Franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a Franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
- (i) the failure of the proposed transferee to meet the Franchisor's then current reasonable qualifications or standards.
- (ii) the fact that the proposed transferee is a competitor of the Franchisor or subFranchisor.
- (iii) the unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) the failure of the franchisee or proposed transferee to pay any sums owing to the Franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, specifically the addendum for Michigan, there are several conditions that constitute 'good cause' for Angry Chickz to refuse a franchise transfer. These include the proposed transferee's failure to meet Angry Chickz's current qualifications or standards, if the proposed transferee is a competitor of Angry Chickz, or if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations. Additionally, 'good cause' exists if the franchisee or proposed transferee fails to pay any sums owing to Angry Chickz or to cure any default in the franchise agreement at the time of the proposed transfer.
These stipulations are important for prospective franchisees in Michigan as they outline the circumstances under which they may be prevented from transferring their franchise to another party. It is fairly standard in franchising to have transfer requirements, as the franchisor needs to protect their brand by ensuring any new franchisee meets their standards.
It is also important to note that Angry Chickz retains the right of first refusal to purchase the franchise, meaning they can preemptively purchase the franchise themselves if a transfer is proposed. This provision does not prevent Angry Chickz from exercising this right. Franchisees should carefully consider these conditions and their implications before entering into a franchise agreement with Angry Chickz in Michigan.