Does the Angry Chickz Franchise Disclosure Document contain all the provisions related to the franchise relationship?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| a. Length of the | § 3.1 | 10 years |
| franchise term | ||
| b. Renewal or | § 3.2 | 2 successive 5-year periods |
| extension of the | ||
| term | ||
| c. Requirements for franchisee to renew or extend | §§ 3.2 – 3.4 | We use the term "renewal" to refer to extending our franchise relationship at the end of your initial term (and any other renewal or extension of the initial term). You may be asked to sign a contract with materially different terms and conditions than your original contract. You must: (1) pay the successor agreement fee; (2) have complied with your obligations during the term of your Franchise Agreement; (3) have delivered a notice between 9 and 12 months before the expiration of the Term; (4) execute a new franchise agreement which may contain materially different terms and conditions from your original contract; (5) must have undertaken and completed at your expense the remodeling, renovation and refurbishment of your Angry Chickz Restaurant, unless you have remodeled your business within the preceding 5 years; (6) sign a general release; (7) not have committed three or more material defaults during prior 36 month period and (8) you or your employees, as applicable, must have complied with our then-current qualification, training and certification requirements, at your expense. |
| Provision | Section in Franchise Agreement | Summary |
| --------------------------------------------------- | ----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| assign to us (at our option) all internet web pages, email address, social media listings, domain names and other registrations containing the marks. If applicable, pay liquidated damages. See also "r" below. | ||
| j. Assignment of | § 13.1 | No restriction on our right to assign. |
| contract by | ||
| Franchisor | ||
| k. "Transfer" by | § 13.2.1 | Includes transfer of the agreement or change in ownership of a franchisee which is an entity. |
| franchisee – defined | ||
| Franchisor approval of transfer | § 13.2 | Transfers require our express written consent You must: (i) provide a detailed description of the price and material terms of the transfer/Assignment; (ii) provide us a list of your Owners and others with an interest in the franchise agreement; (iii) have complied with the right of first refusal and we must not have exercised our right of first refusal; (iv) not be in default; (v) be current to your obligations to third parties; (vi) have signed a release and your Owners must have signed a release; (vii) not have any suit or action pending or threatened with respect to your Angry Chickz Restaurant; (viii) pay the Transfer Fee; and (ix) agree to a non-competition agreement accepted to us which agreement is substantially similar to the Franchise Agreement terms. |
| m. Conditions for franchisor approval of transfer | §§ 13.2 – 13.4 | New franchisee must: (i) qualify; (ii) have the right to occupy the location by assignment or assumption of the lease or purchase of the location; (iii) assume the Franchise Agreement or sign a new Franchise Agreement; (iv) agree to refurbish your Angry Chickz Restaurant; and (v) complete training. The franchisee's rights to receive payments in connection with the transfer must be subordinated to our rights to receive payment and the other obligations to us. (See also "r" below). If the new franchisee is a business entity, all holders of a 20% or greater interest in the new franchisee must sign a guaranty. You must reimburse us for all costs and expenses that we incur in connection with such a transfer, including attorneys' fees. |
| Provision | Section in Franchise Agreement | Summary |
| --------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| n. Franchisor's right | § 13.3 | We can match any offer for your business. |
| of first refusal to | ||
| acquire franchisee's | ||
| business | ||
| o. Franchisor's option to purchase franchisee's business | §§ 15.3.1 – 15.3.2 | Upon termination or expiration of your Franchise Agreement, we may purchase such equipment and furnishings as we designate that are associated with your Angry Chickz Restaurants, for the fair market value. You must make customary representations and warranties to us. |
| p. Death or disability of franchisee | § 14.3.2 | Your heirs have 6 months after your death or legal incapacity to enter into a new franchise agreement, if the heirs meet our standards and qualifications. If your heirs do not meet our standards and qualifications, the heirs may sell to a person approved by us. See "m" above. |
| q. Non-competition covenants during the term of the franchise | § 12.1 | Can not engage in "Competitive Activities" which means to, own, operate, lend to, advise, be employed by, or have any financial interest in (i) any restaurant 25% or more of whose gross sales is derived from the sale of boneless breaded chicken, other than an Angry Chickz Restaurant operated pursuant to a validly subsisting Franchise Agreement, or (ii) any business that specializes in developing, owning, operating or franchising restaurants 25% or more of whose gross sales is derived from the sale of boneless breaded chicken, or (iii) any business engaged in the preparation, production or sale, at wholesale, of any boneless breaded chicken food products. "Competitive Activities" shall not include the direct or indirect ownership solely as an investment, of securities of any entity which is traded on any national securities exchange if the owner (i) is not a controlling person of, or a member of a group which controls, such entity and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such entity. |
| r. Non-competition covenants after the franchise is terminated or expires | § 12.1 | No involvement in any Competitive Activities for 24 months within the Protected Area or within a radius of 10 miles from any then-existing Angry Chickz Restaurant. |
| Provision | Section in Franchise Agreement | Summary |
| --------------------------------------------------- | ----------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| s. Modification of the agreement | § 18.7 | The Franchise Agreement may be modified only by written agreement between the parties. |
| t. Integration/Merger clause | § 18.7 | Only the terms of the Franchise Agreement and other written agreements are binding (subject to applicable state law). Any representations or promises outside of the disclosure document and franchise agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation | Not applicable | You and we agree that all arbitrations will be held at a suitable location to be chosen by the arbitrator which is within twenty-five (25) miles of our principal business address at the time that the arbitration action is filed, and you and we both waive the right to a trial by jury to the maximum extent permitted. |
| v. Choice of forum | §§ 17.1 - 17.3 | Any and all claims and actions must be brought or asserted before the expiration of the earlier of (a) the time period for bringing an action under any applicable state or federal statute of limitations; (b) one (1) year after the date upon which a party discovered, or should have discovered, the facts giving rise to an alleged claim; or (c) two (2) years after the first act or omission giving rise to an alleged claim; or its expressly acknowledged and agreed by all parties that such claims or actions shall be irrevocably barred. Claims attributable to underreporting of sales, and claims of the parties for failure to pay monies owed and/or indemnification shall be subject to only the applicable state or federal statute of limitations. These provisions may be subject to applicable state law. |
| w. Choice of law | § 18.6 | California law applies, except for the provisions respecting non-competition, which are governed by local law. |
| w. Choice of law | y 10.0 | These provisions may be subject to applicable state law. |
Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 39–48)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, Item 17 outlines various provisions related to the franchise relationship, including renewal, termination, transfer, and dispute resolution. The franchise term is 10 years, with an option to renew for two successive 5-year periods. To renew, a franchisee must meet several requirements, including paying a successor agreement fee, complying with obligations during the franchise term, providing timely notice, executing a new franchise agreement (which may have materially different terms), completing remodeling of the Angry Chickz restaurant (unless remodeled within the prior 5 years), signing a general release, avoiding multiple material defaults, and ensuring that the franchisee and employees meet current training and certification requirements.
Angry Chickz also has specific conditions for the transfer of a franchise. The franchisee needs to provide detailed information about the transfer terms, a list of owners, and must not be in default. The franchisor has the right of first refusal to acquire the franchisee's business and also has the option to purchase the franchisee's business upon termination or expiration of the Franchise Agreement for fair market value. Heirs of a deceased or legally incapacitated franchisee have 6 months to enter into a new franchise agreement if they meet Angry Chickz's standards; otherwise, they may sell the franchise to an approved person.
During the franchise term and after termination or expiration, franchisees are subject to non-competition covenants. During the term, franchisees cannot engage in "Competitive Activities," which include involvement with businesses deriving a significant portion of their sales from boneless breaded chicken. After termination or expiration, franchisees are restricted from involvement in any Competitive Activities for 24 months within the Protected Area or within a 10-mile radius of any existing Angry Chickz restaurant. The Franchise Agreement can only be modified by a written agreement between both parties, and only the terms within the Franchise Agreement and other written agreements are binding. Disputes are resolved through arbitration, held within 25 miles of Angry Chickz's principal business address, and both parties waive the right to a jury trial. California law governs the agreement, except for non-competition provisions, which are governed by local law. Any claims or actions must be brought within a specific time frame, generally one to two years after the discovery of the facts giving rise to the claim, subject to state law.