Following the expiration of the Angry Chickz Area Development Agreement, what rights does the company or its affiliates have regarding restaurants within or outside the Development Area?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Effect of Expiration. Developer shall have no right to renew or extend the Term or have an option to enter into any successor area development agreement. Following the expiration of the Term, or the sooner termination of this Agreement, (a) Developer shall have no further right to construct, equip, own, open or operate additional Restaurants which are not, at the time of such termination or expiration, the subject of a then existing Franchise Agreement between Developer (or an Affiliate of Developer) and Company which is then in full force and effect, and (b) Company or its Affiliates may thereafter itself exercise all of its rights, including the right to construct, equip, open, own or operate, franchise, and license others to (or grant development rights to) construct, equip, open, own or operate Restaurants at any location(s) (within or outside of the Development Area), without any restriction, subject only to any territorial rights granted for any then-existing Restaurants pursuant to a validly subsisting Franchise Agreement executed for such Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, upon the expiration or termination of the Area Development Agreement, the developer loses the right to construct, equip, own, open, or operate additional Angry Chickz restaurants, except for those already under existing Franchise Agreements.
Following the expiration or termination of the Area Development Agreement, Angry Chickz and its affiliates have the right to exercise all of their rights without restriction. This includes the right to construct, equip, open, own, operate, franchise, and license others to do the same. These activities can occur at any location, whether within or outside the former Development Area. The only limitation is any territorial rights granted under existing Franchise Agreements for specific restaurants.
This means that Angry Chickz can establish new company-owned restaurants or grant franchises to others within the former development area, potentially in direct competition with the former developer, subject to existing franchise agreements. This is a significant consideration for prospective developers as it highlights the limited term and non-renewable nature of the Area Development Agreement.