If Angry Chickz cures a franchisee's default, when is the cost due and payable?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.2 Company's Right To Cure Defaults. In addition to all other remedies, if Franchisee shall default in the performance of any of its obligations or breach any term or condition of this Agreement or any related agreement, Company may, at its election, immediately or at any time thereafter, without waiving any claim for default or breach and without notice to Franchisee, cure such default or breach for the account and on behalf of Franchisee, and the cost to Company shall be due and payable on demand and shall be deemed to be additional compensation due to Company and shall be added to the amount of compensation next accruing, at the election of Company.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if a franchisee defaults on their obligations, Angry Chickz has the option to cure the default on behalf of the franchisee. If Angry Chickz chooses to do so, the cost incurred by Angry Chickz is due and payable by the franchisee on demand.
This means that Angry Chickz can immediately demand reimbursement for any expenses they incur while curing the franchisee's default. Furthermore, Angry Chickz can elect to add the cost to the amount of compensation next accruing. This could include royalties, marketing fees, or other regular payments the franchisee owes to Angry Chickz.
For a prospective Angry Chickz franchisee, this clause highlights the importance of fulfilling all contractual obligations to avoid default. If a default occurs and Angry Chickz steps in to cure it, the franchisee must be prepared to immediately reimburse Angry Chickz for all associated costs. This could place a significant financial strain on the franchisee, especially if the costs are substantial or unexpected. The franchisee should maintain open communication with Angry Chickz to understand the nature of any default and the potential costs of curing it.
This is a fairly standard clause in franchise agreements, allowing the franchisor to protect the brand and system standards while ensuring they are compensated for their efforts and expenses in rectifying a franchisee's default. Franchisees should carefully review this section of the franchise agreement and understand the potential financial implications of defaulting on their obligations.