If Angry Chickz cures a franchisee's default, how is the cost treated?
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 without waiving any claims related to the default.
The cost that Angry Chickz incurs while curing the default is due and payable immediately upon demand. At Angry Chickz's election, these costs are considered additional compensation owed to Angry Chickz and will be added to the compensation next accruing.
This means that if Angry Chickz chooses to step in and correct a franchisee's default, the franchisee is responsible for reimbursing Angry Chickz for all associated costs. This reimbursement is treated as additional compensation owed to Angry Chickz, giving them the option to add it to the franchisee's next payment. This could significantly increase the franchisee's financial burden in the short term, so it's important to understand the circumstances under which Angry Chickz might exercise this right and how those costs are calculated.