If an Angry Chickz franchisee is delinquent in payments, how does the company apply received funds?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
any, in its sole and exclusive determination may increase royalty rates and other means to compensate for that lost revenue.
- 4.8.3 Franchisee shall remain current and fully comply and perform each of its obligations to its landlord, vendors and Suppliers.
- 4.9 Application of Funds. If Franchisee becomes delinquent in the payment of any obligation to Company or any of its Affiliates under this Agreement or any other agreement, Company shall have the absolute right to apply any payments received from Franchisee to any obligation owed Company or such Affiliate, notwithstanding any contrary designation by Franchisee.
- 4.10 Interest and Charges for Late Payments. If Franchisee fails to pay to Company all sums owed to Company or its Affiliates promptly when due, Franchisee shall pay interest on the unpaid amounts from the date due, at the rate of 18% per annum, or the highest rate allowable under Applicable Law, whichever is less. If any check, draft or electronic tra
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if a franchisee becomes delinquent in their payment obligations to Angry Chickz or its affiliates, the company has the right to apply any payments received from the franchisee to any obligation owed to them or their affiliates. This is regardless of any specific designation the franchisee might have intended for those funds.
This means that if an Angry Chickz franchisee owes money for multiple things (e.g., royalties, marketing fees, supplies), and they send in a payment without specifying where it should go, Angry Chickz can apply that payment to whichever debt they choose. This protects Angry Chickz by allowing them to prioritize the debts that are most important to them.
For a prospective Angry Chickz franchisee, this highlights the importance of staying current on all payments. If a franchisee falls behind, they lose control over how their payments are allocated, potentially leading to further complications and late fees. The agreement also specifies that late payments incur interest at a rate of 18% per annum, or the highest rate allowable under applicable law, whichever is less, and a $50 fee for any unpaid check, draft, or electronic transfer due to insufficient funds.