Does the Angry Chickz Continuing Guaranty require the Guarantor to comply with the Non-Competition covenant?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain Covenants Incorporated.
Sections 12.1 (Non-Competition), 12.2 (Confidential Information), 12.5 (Effect of Applicable Law), and 17.1 (Arbitration), and 17.3 (Time for Bringing Claims) of the FA are incorporated into this Continuing Guaranty by reference, and Guarantor agrees to comply with and perform each of such covenants as though fully set forth in this Continuing Guaranty as a direct and primary obligation of Guarantor.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the Continuing Guaranty does incorporate the Non-Competition covenant from the Franchise Agreement. Specifically, Section 6 of the Continuing Guaranty states that Section 12.1 (Non-Competition) of the Franchise Agreement is incorporated by reference. This means the Guarantor agrees to comply with the non-compete terms as if they were directly written into the Guaranty itself.
This has significant implications for anyone acting as a Guarantor for an Angry Chickz franchise. The Guarantor, who is often a principal owner or related party, is bound by the same non-competition restrictions as the franchisee. These restrictions prevent the Guarantor from engaging in any competitive activities during the term of the franchise agreement and for a period of 24 months after termination or expiration, within a specified geographic area. This area includes the Protected Area or within a radius of 10 miles from any then-existing Angry Chickz Restaurant.
The incorporation of the non-competition covenant into the Continuing Guaranty ensures that Angry Chickz can protect its brand and market share. By binding the Guarantor to these terms, Angry Chickz aims to prevent individuals with close ties to the franchise from opening competing businesses that could undermine the success of the franchised location. Prospective franchisees and their guarantors should carefully review Section 12.1 of the Franchise Agreement to fully understand the scope and limitations of the non-competition covenant, as they will both be held accountable for compliance.