Does the Angry Chickz franchise agreement include a cross-default provision, and if so, on what page is it discussed?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
14.7 Cross-Default. Any default by Franchisee under the terms and conditions of this Agreement, any lease for the Location, or any other agreement between Company (or its Affiliate), and Franchisee (or any Affiliate of Franchisee) (other than solely default of the Development Obligation under an Area Development Agreement), or any default by Franchisee (or any Affiliate of Franchisee) of its obligations to any Co-Op Advertising Region of which it is a member, shall be deemed to be a default of each and every said agreement. Furthermore, in the event of termination, for any cause, of this Agreement or any other agreement between the parties hereto, Company may, at its option, terminate any or all said agreements.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the franchise agreement does contain a cross-default provision. Specifically, Article 14.7 of the franchise agreement outlines the cross-default terms.
This means that if a franchisee defaults on any agreement with Angry Chickz or its affiliates, it will be considered a default across all agreements. This includes the franchise agreement itself, any lease for the restaurant location, or any other agreement between Angry Chickz (or its affiliate) and the franchisee (or their affiliate). The only exception to this rule is defaulting on the Development Obligation under an Area Development Agreement. Also, defaulting on obligations to any Co-Op Advertising Region the franchisee is a member of will trigger the cross-default provision.
Furthermore, if any agreement between the franchisee and Angry Chickz is terminated for any reason, Angry Chickz has the option to terminate any or all other agreements. This provision gives Angry Chickz significant leverage, as a default in one area can trigger a cascade of consequences, potentially leading to the termination of the entire franchise relationship. Franchisees should be aware of this provision and ensure they can meet all obligations under all agreements to avoid triggering a cross-default.