What constitutes 'good cause' for Angry Chickz to refuse a transfer of ownership?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:
- (c) A provision that permits a Franchisor to terminate a franchise prior to the expiration of its term except for good cause.
Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz FDD, the definition of 'good cause' for termination, which would likely extend to refusing a transfer of ownership, is specifically addressed in the addendum for the state of Michigan.
The FDD states that in Michigan, Angry Chickz can terminate a franchise agreement, and by extension likely refuse a transfer, if the franchisee fails to comply with any lawful provision of the franchise agreement. Furthermore, Angry Chickz must provide written notice of the failure and allow a reasonable opportunity to correct the issue. The FDD specifies that this cure period does not need to exceed 30 days.
This stipulation protects franchisees in Michigan by preventing arbitrary or capricious terminations or transfer refusals. It ensures that Angry Chickz must have a legitimate, documented reason based on the franchise agreement and provide an opportunity for the franchisee to rectify the situation before termination or refusal of transfer is enacted. Franchisees in Michigan should pay close attention to the franchise agreement and ensure compliance to avoid potential issues.