What constitutes a prohibited assignment under the Angry Chickz franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2.2 Any purported Assignment occurring by operation of law or otherwise without Company's prior written consent shall constitute a material default of this Agreement by Franchisee.
Except in the instance of Franchisee advertising to sell the Franchised Business and assign this Agreement in accordance with the terms of this Agreement, Franchisee shall not, without Company's prior written consent, offer for sale or transfer at public or private auction or advertise publicly for sale or transfer, the furnishings, interior and exterior decor items, supplies, FFE, the Assets, the lease any real property used in connection with the Franchised Business.
To the extent that any prohibition on the pledge, hypothecation, encumbrance or granting of a security interest in this Agreement or the Assets may be ineffective under Applicable Law, Franchisee shall provide not less than 10 days prior written notice containing the name and address of the secured party and the terms of such pledge, hypothecation, encumbrance or security interest in this Agreement or the Assets.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, a prohibited assignment occurs if a franchisee attempts to transfer their rights or obligations under the franchise agreement without obtaining prior written consent from Angry Chickz. This includes any assignment that occurs by operation of law or otherwise. Such an unapproved assignment constitutes a material default of the agreement.
Angry Chickz maintains strict control over who can operate a franchise to protect its brand and system. The franchise agreement is personal to the franchisee, and Angry Chickz relies on the individual's character, skills, business ability, and financial capacity. Therefore, any transfer of ownership or control must be approved by Angry Chickz, which may impose conditions on the assignment.
Specifically, a franchisee is prohibited from offering for sale or transferring at public or private auction, or advertising publicly for sale or transfer, the furnishings, interior and exterior decor items, supplies, FFE (furniture, fixtures, and equipment), the Assets, or the lease of any real property used in connection with the Franchised Business, without prior written consent from Angry Chickz. The only exception is if the franchisee is advertising to sell the Franchised Business and assign the Agreement in accordance with the terms of the Agreement.
Even pledging, hypothecating, encumbering, or granting a security interest in the franchise agreement or its assets requires providing Angry Chickz with written notice at least 10 days in advance. This notice must include the name and address of the secured party and the terms of the security interest. This ensures Angry Chickz is aware of any potential changes in control or financial obligations related to the franchise.