Does the Angry Chickz franchise agreement specify any conditions under which the automatic termination provisions would not apply due to Applicable Laws?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
d holders shall reexecute a written guaranty in a form prescribed by Company.
ARTICLE 14 DEFAULT AND TERMINATION
- 14.1 General. Company shall have the right to terminate this Agreement only for "cause". "Cause" is hereby defined as a default of this Agreement. Company shall exercise its right to terminate this Agreement in the following circumstances and manners.
- 14.2 Automatic Termination Without Notice. Subject to Applicable Laws of the jurisdiction in which the Franchised Business is operated to the contrary, Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall at Company's election automatically terminate without notice to Franchisee if: (i) Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any contrary provisions of Applicable Law), shall admit to its inability to meet its financial obligations as they become due, or shall make a disposition for the benefit of its creditors; (ii) a judgment against Franchisee in the amount of more than $25,000 remains unsatisfied for a period of more than 30 days (unless an appeal bond has been filed); (iii) the Franchised Business, the Premises, or any of the Assets are seized, taken over or foreclosed by a government official in the exercise of its duties, or seized, taken over, or foreclosed by a creditor or lienholder provided that a final judgment against the Franchisee remains unsatisfied for 30 days (unless an appeal bond has been filed); (iv) a levy of execution or attachment has been made upon the license granted by this Agreement or upon any of the Assets, and it is not discharged within 5 days of such levy or attachment; (v) Franchisee permits any recordation of a notice of mechanics lien against the Franchised Business or any equipment at the Franchised Business which is not released within 60 days, or if any person commences any action to foreclose on the Franchised Business or said equipment; (vi) Franchisee allows or permits any judgment to be entered against Company or any of its Affiliates, arising out of or relating to the operation of the Franchised Business; or (vii) a condemnation or transfer in lieu of condemnation has occurred.
- 14.3 Option to Terminate Without Opportunity to Cure.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the automatic termination of the franchise agreement without notice is subject to the applicable laws of the jurisdiction where the franchised business operates. This means that if any local, state, or federal laws contradict the automatic termination terms outlined in the agreement, those laws will take precedence.
Specifically, the franchise agreement states that if a franchisee is adjudicated bankrupt or judicially determined to be insolvent, admits to an inability to meet financial obligations, or makes a disposition for the benefit of creditors, Angry Chickz can automatically terminate the agreement. However, this is conditional, as the phrase "subject to any contrary provisions of Applicable Law" is included. Similarly, other conditions that would trigger automatic termination, such as unsatisfied judgments, seizure of assets, or certain liens, are also subject to applicable laws.
Furthermore, the Angry Chickz franchise agreement addresses potential conflicts between its terms and applicable laws regarding termination rights. It states that if any applicable law limits Angry Chickz's termination rights or requires longer notice or cure periods than those specified in the agreement, the agreement will be amended to conform to the minimum requirements of that applicable law. This ensures that the franchise agreement remains compliant with legal requirements, even if those requirements differ from the standard terms outlined in the agreement. However, the agreement also states that Angry Chickz is not required to grant a longer cure period than initially specified in the agreement.
For a prospective Angry Chickz franchisee, this means that the specific circumstances under which the franchise can be terminated automatically may vary depending on the laws of their state or locality. It is important to consult with a legal professional to understand how local laws may affect the termination provisions of the franchise agreement.