In an Angry Chickz franchise assignment, what recourse does the franchisee have if the company unreasonably withholds consent?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
er the replacement franchise or license agreement;
- (k) that the transferee/assignee agrees to refurbish the Franchised Business as needed (in Company's discretion) to match the then-current Standards;
- (l) that there shall not be any suit, action, or proceeding pending, or to the knowledge of Franchisee any suit, action, or proceeding threatened, against Franchisee with respect to the Franchised Business;
- (m) that Franchisee shall have paid to Company a nonrefundable administrative/transfer fee equal to 25% of Company's then-current initial franchise fee, but not less than $12,500, plus Company's then current training fees (but not less than $5,000) and reimbursement of Company's costs associated with the transfer/assignment, including attorneys'' fees;;
- (n) that Franchisee and its Owners agree with the assignee/transferee not to co
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
Based on the 2025 Angry Chickz Franchise Disclosure Document, the document does not specify what recourse a franchisee has if the company unreasonably withholds consent for an assignment. However, the FDD does outline conditions under which Angry Chickz may impose conditions or deny consent for a franchise assignment.
Specifically, Angry Chickz can impose conditions such as requiring a detailed description of the assignment terms, ensuring the transferee assumes the location obligations, subordinating the franchisee's payment rights to any outstanding debts, and confirming compliance with various agreements and obligations. They can also deny the assignment if the franchisee is in default, if there are pending lawsuits, or if the transferee does not complete the initial training program. Additionally, a nonrefundable administrative/transfer fee equal to 25% of Company's then-current initial franchise fee, but not less than $12,500, plus Company's then current training fees (but not less than $5,000) and reimbursement of Company's costs associated with the transfer/assignment, including attorneys'' fees is required.
Given the absence of explicit recourse mentioned in the FDD, a prospective Angry Chickz franchisee should directly ask the franchisor about the process for appealing a denied assignment or seeking remedies if they believe consent was unreasonably withheld. Understanding the franchisor's perspective on what constitutes "reasonable" grounds for denial is also crucial. It would be prudent to consult with a franchise attorney to review the franchise agreement and understand the franchisee's rights under applicable state laws regarding franchise assignments and franchisor consent.