For an Angry Chickz franchise assignment, can the company require the transferee to assume obligations beyond those in the existing franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) that the transferee/assignee shall have agreed, under a written assumption agreement approved by Company, that at closing, the transferee/assignee shall, at Company's option, either (a) assume this Agreement; provided however, that such assumption shall not relieve Franchisee (as transferor/assignor) of any continuing obligations; or (b) execute a replacement franchise or license agreement on the then-current form of franchise agreement used by Company in the State in which the Franchised Business is being operated, provided, however, that the term of the replacement franchise or license agreement shall be, at Company's option, the remaining term of this Agreement, unless Company otherwise agrees; and, at Company's request, the transferor/assignor shall have executed a continuing guaranty in favor of Company of the performance and payment by the transferee/assignee of all obligations and debts to Company and its Affiliates under the replacement franchise or license agreement;
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, when a franchisee seeks to assign their franchise agreement, Angry Chickz has the option to require the transferee to agree to certain conditions. One of these conditions is that the transferee/assignee, at Angry Chickz's option, must either (a) assume the existing franchise agreement or (b) execute a replacement franchise agreement.
If Angry Chickz chooses the latter option, the replacement agreement will be on the then-current form used by Angry Chickz in the state where the franchised business operates. The term of this replacement agreement can be, at Angry Chickz's option, the remaining term of the original agreement, unless Angry Chickz agrees otherwise. Additionally, Angry Chickz can request that the transferor/assignor provide a continuing guaranty for the performance and payment obligations of the transferee/assignee under the replacement franchise agreement.
This means that Angry Chickz has the right to require a transferee to sign a new franchise agreement with potentially different terms than the original agreement. This could include updated fees, standards, or other obligations that were not part of the initial franchise agreement. A prospective franchisee should carefully consider this when planning for a potential future sale of their Angry Chickz franchise.