If Angry Chickz cures a franchisee's default, how is the cost treated regarding compensation?
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. The cost incurred by Angry Chickz to cure the default is then due and payable by the franchisee upon demand.
This cost is considered additional compensation owed to Angry Chickz. At Angry Chickz's election, this cost will be added to the amount of compensation next accruing.
This clause in the franchise agreement means that franchisees could face unexpected expenses if they fail to meet their contractual obligations, and Angry Chickz steps in to correct the issue. Franchisees need to maintain sufficient capital to cover not only their regular operating expenses but also potential costs incurred by Angry Chickz for curing defaults.