What happens to the Angry Chickz franchise if condemnation occurs?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
d holders shall reexecute a written guaranty in a form prescribed by Company.
ARTICLE 14 DEFAULT AND TERMINATION
- 14.1 General. Company shall have the right to terminate this Agreement only for "cause". "Cause" is hereby defined as a default of this Agreement. Company shall exercise its right to terminate this Agreement in the following circumstances and manners.
- 14.2 Automatic Termination Without Notice. Subject to Applicable Laws of the jurisdiction in which the Franchised Business is operated to the contrary, Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall at Company's election automatically terminate without notice to Franchisee if: (i) Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any contrary provisions of Applicable Law), shall admit to its inability to meet its financial obligations as they become due, or shall make a disposition for the benefit of its creditors; (ii) a judgment against Franchisee in the amount of more than $25,000 remains unsatisfied for a period of more than 30 days (unless an appeal bond has been filed); (iii) the Franchised Business, the Premises, or any of the Assets are seized, taken over or foreclosed by a government official in the exercise of its duties, or seized, taken over, or foreclosed by a creditor or lienholder provided that a final judgment against the Franchisee remains unsatisfied for 30 days (unless an appeal bond has been filed); (iv) a levy of execution or attachment has been made upon the license granted by this Agreement or upon any of the Assets, and it is not discharged within 5 days of such levy or attachment; (v) Franchisee permits any recordation of a notice of mechanics lien against the Franchised Business or
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if a condemnation or transfer in lieu of condemnation occurs, the franchise agreement can be automatically terminated without notice, subject to applicable laws. This means that if the government or another entity takes the property where the Angry Chickz restaurant is located for public use, or if the franchisee transfers the property to avoid condemnation, Angry Chickz has the right to immediately terminate the franchise agreement.
This type of clause is relatively standard in franchise agreements. It protects Angry Chickz from having its brand associated with a location that is no longer suitable or available for business. It also avoids potential legal complications that could arise from operating a franchise on condemned property.
For a prospective Angry Chickz franchisee, this clause highlights the importance of location security. While condemnation is not a common occurrence, it is a risk that franchisees should be aware of. Franchisees may want to investigate the likelihood of condemnation in their chosen location and consider negotiating terms related to compensation or relocation assistance in the event of condemnation.