In an Angry Chickz franchise assignment, must the transferee/assignee agree to assume the existing agreement or execute a replacement 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 Angry Chickz's 2025 Franchise Disclosure Document, in the event of a franchise assignment, the transferee/assignee must agree to certain conditions. Specifically, the transferee/assignee must agree, under a written assumption agreement approved by Angry Chickz, to either assume the existing franchise agreement or execute a replacement franchise agreement. This decision is at Angry Chickz's option. If the transferee/assignee assumes the existing agreement, the original franchisee (transferor/assignor) is not relieved of any continuing obligations. If a replacement agreement is executed, its term will be the remaining term of the original agreement, unless Angry Chickz agrees otherwise.
Furthermore, if a replacement franchise agreement is used, Angry Chickz may request that the transferor/assignor execute a continuing guaranty in favor of Angry Chickz. This guaranty would ensure the performance and payment of all obligations and debts by the transferee/assignee under the new franchise agreement. This stipulation protects Angry Chickz's interests by ensuring that the new franchisee is financially sound and committed to fulfilling the franchise obligations.
In addition to the agreement on the franchise terms, the transferee/assignee must also demonstrate to Angry Chickz's satisfaction that they meet all current standards for new restaurant operators or holders of an interest in a franchise. This includes satisfactory credit ratings, acceptable business qualifications, the ability to obtain necessary licenses and permits, and the ability to fully comply with the terms of the franchise agreement. The transferee/assignee must also agree to refurbish the franchised business as needed to match the current standards, as determined by Angry Chickz.
These conditions are typical in franchise agreements to ensure that any new franchisee meets the franchisor's standards and is capable of maintaining the brand's reputation and operational consistency. Prospective franchisees should carefully consider these requirements and ensure they can meet them before pursuing a franchise assignment.