What happens if the Angry Chickz franchised business is seized by a government official?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
er or assignment of an interest in Franchisee, or other change in ownership interests in Franchisee, and at any other time upon Company's request, said 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 the 2025 Angry Chickz Franchise Disclosure Document, if the franchised business, its premises, or any of its assets are seized by a government official in the exercise of their duties, Angry Chickz has the right to automatically terminate the Franchise Agreement without providing prior notice to the franchisee. This is subject to applicable laws in the jurisdiction where the franchised business operates.
This clause also applies if the business is 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. Additionally, Angry Chickz can terminate the agreement without notice if the franchisee is adjudicated bankrupt or judicially determined to be insolvent, admits to an inability to meet financial obligations, or makes a disposition for the benefit of creditors.
For a prospective Angry Chickz franchisee, this means that any form of government seizure or significant financial distress leading to asset seizure could result in an immediate loss of the franchise. It is crucial for franchisees to maintain financial stability and comply with all legal and regulatory requirements to avoid such circumstances. The franchisee bears the risk of immediate termination without recourse if these conditions are met, highlighting the importance of due diligence and sound financial management.