Can an Angry Chickz franchisee transfer if they are in default?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 39–48)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, a franchisee is not permitted to transfer their franchise if they are in default. The FDD outlines several requirements that a franchisee must meet to gain approval for a transfer.
Specifically, the franchisee must provide a detailed description of the price and material terms of the transfer, furnish a list of owners and others with an interest in the franchise agreement, ensure Angry Chickz has not exercised its right of first refusal, and remain current with obligations to third parties. Additionally, the franchisee and their owners must sign a release, and there should be no pending or threatened suits or actions related to the Angry Chickz restaurant. The franchisee must also pay the transfer fee and agree to a non-competition agreement acceptable to Angry Chickz.
The explicit requirement that the franchisee 'not be in default' underscores the importance of maintaining compliance with the franchise agreement. Defaulting on the agreement can arise from various issues, such as failure to pay fees or adhere to operational standards. This provision protects Angry Chickz by ensuring that new franchisees are financially stable and committed to upholding the brand's standards.
For a prospective Angry Chickz franchisee, this means maintaining good standing with the franchisor is crucial not only for the ongoing operation of the franchise but also for any future plans to sell or transfer the business. Failing to meet these conditions can prevent a franchisee from transferring their business, potentially resulting in financial losses or other adverse consequences.