What is the franchisee required to deliver to Angry Chickz at closing when the company exercises its purchase option?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.3.4 Company shall pay Franchisee the purchase price (by corporate check, or offset, or a combination, as applicable) at closing of the purchase; the closing shall take place at a time and place designated by Company within ninety (90) calendar days after Franchisee receives Company's notice of exercise of the purchase option; at closing, Franchisee shall deliver to Company an assignment (and other documentation as Company deems appropriate) transferring good and marketable title to the assets selected by Company, free of liens and encumbrances, with all sales and other transfer taxes paid by Franchisee;
- 15.3.5 If Company elects, then the parties shall comply with applicable bulk sales provisions of the commercial code in the state where the Franchised Business is located, and Company shall have the right to delay the closing until such compliance is completed; and
- 15.3.6 At Company's election, as part of the purchase Franchisee shall deliver to Company an assignment of the lease for the Location (or, if assignment is prohibited, a sublease for the full remaining term and on the same terms as Franchisee's lease); if Franchisee owns the Location, Franchisee shall lease the Location to Company pursuant to the terms of a form lease reasonably designated by Company, for a term selected by Company up to 5 years with two successive 5-year renewal options at fair market rental during the initial and renewal terms.
- 15.3.7 Company shall have the unrestricted right to assign its purchase option in this Section 15.3.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, when Angry Chickz exercises its purchase option, the franchisee must deliver specific items to the company at closing. This includes an assignment, along with any other documentation Angry Chickz deems necessary, to transfer good and marketable title to the assets that Angry Chickz has selected for purchase. This transfer must be free of any liens or encumbrances, and the franchisee is responsible for paying all sales and other transfer taxes associated with the transaction.
Additionally, at Angry Chickz's election, the franchisee may also be required to deliver an assignment of the lease for the location to Angry Chickz. If assigning the lease is not permissible, the franchisee must provide a sublease for the full remaining term of the original lease, maintaining the same terms and conditions. If the franchisee owns the location, they are obligated to lease the location to Angry Chickz under the terms of a lease agreement designated by Angry Chickz. The term of this lease will be selected by Angry Chickz, up to five years, with the possibility of two successive five-year renewal options at a fair market rental rate during both the initial and renewal periods.
The closing will occur at a time and place designated by Angry Chickz, within 90 calendar days after the franchisee receives notice that Angry Chickz is exercising its purchase option. Angry Chickz has the right to assign its purchase option to another party without restriction. Furthermore, if Angry Chickz chooses, the parties must adhere to the applicable bulk sales provisions of the commercial code in the state where the franchised business is located, and Angry Chickz can delay the closing until compliance is complete.
This clause ensures that Angry Chickz can take control of the franchise location and assets smoothly if they choose to exercise their purchase option, while also outlining the franchisee's responsibilities in facilitating this transfer. Prospective franchisees should carefully consider these obligations, particularly regarding the transfer of the lease or the leasing of owned property, as these could have significant financial and operational implications.