Can an Angry Chickz franchisee transfer if there is a pending lawsuit related to the restaurant?
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 the 2025 Angry Chickz Franchise Disclosure Document, a franchisee is restricted from transferring their franchise if there is a pending lawsuit or threatened action concerning their Angry Chickz restaurant. Specifically, the franchisee must not "have any suit or action pending or threatened with respect to your Angry Chickz Restaurant" to gain franchisor approval for a transfer.
This condition is one of several prerequisites Angry Chickz imposes for approving a franchise transfer. Other stipulations include providing a detailed description of the transfer's price and terms, supplying a list of owners, complying with right of first refusal protocols, ensuring the franchisee is not in default, remaining current with obligations to third parties, signing a release, paying a transfer fee, and adhering to a non-competition agreement.
For a prospective Angry Chickz franchisee, this means that any existing legal issues involving the restaurant must be resolved before a transfer can be considered. This requirement protects Angry Chickz from potential liabilities and ensures a smooth transition to the new franchisee. It also highlights the importance of maintaining compliance and addressing any legal concerns promptly to preserve the option of selling the franchise in the future.