What happens to the non-compete obligation if there is an assignment of the Angry Chickz agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
YOU MUST SIGN A GENERAL RELEASE IF YOU RENEW OR TRANSFER YOUR FRANCHISE. CALIFORNIA CORPORATIONS CODE SECTION 31512 VOIDS A WAIVER OF YOUR RIGHTS UNDER THE FRANCHISE INVESTMENT LAW
(CALIFORNIA CORPORATIONS CODE SECTIONS 31000 THROUGH 31505). BUSINESS AND PROFESSIONS CODE SECTION 20010 VOIDS A WAIVER OF YOUR RIGHTS UNDER THE FRANCHISE RELATIONS ACT (BUSINESS AND PROFESSIONS CODE SECTIONS 20000 THROUGH 20043).
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
Based on the 2025 Angry Chickz Franchise Disclosure Document, the franchise agreement contains a covenant not to compete that extends beyond the termination of the franchise. However, the FDD notes that this provision may not be enforceable under California law.
In Maryland, Sections 6.3.4 and 7.2.2 of the Area Development Agreement are amended to provide that any release required as a condition of assignment or renewal will not apply to liability under the Maryland Franchise Registration and Disclosure Law. This suggests that while a release might typically be required during an assignment, it cannot waive rights under Maryland franchise law.
Therefore, if you are an Angry Chickz franchisee in California, the non-compete agreement might not be enforceable. If you are in Maryland, any release required for assignment cannot waive your rights under Maryland franchise law. It is important to consult with a legal professional to understand the specific implications of these provisions in your state.