How is 'control' of a person or entity defined in the Angry Chickz Franchise Agreement's definition of 'Affiliate'?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
"Accounting Period(s)". As of the Effective Date, each accounting period is a one calendar week period and is set forth in the Manual(s).
"Additional Training" shall have the meaning set forth in Section 6.4.1.
"Affiliate" when used in connection with Company or Franchisee, includes each person or Entity which directly, or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Company or Franchisee, as applicable. Without limiting the foregoing, the term "Affiliate" when used in connection with Franchisee includes any Entity 10% or more of whose Equity or voting control, is held by person(s) or Entities who, jointly or severally, hold 10% or more of the Equity or voting control of Franchisee. For purposes of this definition, control of a person or Entity means the power, direct or indirect, to direct or cause the direction of the management and policies of such person or Entity whether by contract or otherwise.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the term "Affiliate" is defined, in part, by the concept of 'control.' For the purposes of defining an affiliate, 'control' of a person or entity means having the power, whether directly or indirectly, to direct or cause the direction of the management and policies of that person or entity. This control can be exerted through a contract or by other means.
This definition is important because it clarifies the scope of who is considered an 'Affiliate' of Angry Chickz or the franchisee. The definition of 'Affiliate' extends to entities that are controlled by, control, or are under common control with Angry Chickz or the franchisee. It also includes entities where 10% or more of the equity or voting control is held by individuals or entities who also hold 10% or more of the equity or voting control of the franchisee.
However, there's an exception: if Angry Chickz or its affiliate has any ownership interest in the franchisee, Angry Chickz or that affiliate is not considered an 'Affiliate' of the franchisee. This means that any obligations or restrictions on an 'Affiliate' of the franchisee do not bind Angry Chickz, its affiliate, or their respective parents, subsidiaries, officers, directors, or managers. This distinction is crucial for understanding the boundaries of responsibility and liability within the franchise relationship.