If a replacement franchise agreement is executed for an Angry Chickz franchise assignment, what is the term of the replacement agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) that the transferee/assignee shall have agreed, under a written assumption agreement approved by Company, that at closing, the transferee/assignee shall, at Company's option, either (a) assume this Agreement; provided however, that such assumption shall not relieve Franchisee (as transferor/assignor) of any continuing obligations; or (b) execute a replacement franchise or license agreement on the then-current form of franchise agreement used by Company in the State in which the Franchised Business is being operated, provided, however, that the term of the replacement franchise or license agreement shall be, at Company's option, the remaining term of this Agreement, unless Company otherwise agrees; and, at Company's request, the transferor/assignor shall have executed a continuing guaranty in favor of Company of the performance and payment by the transferee/assignee of all obligations and debts to Company and its Affiliates under the replacement franchise or license agreement;
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner, the new owner may be required to sign a replacement franchise agreement. At Angry Chickz's option, the term of this replacement agreement will be the remaining term of the original agreement, unless Angry Chickz agrees otherwise.
This means that a prospective Angry Chickz franchisee who purchases an existing franchise may not necessarily receive a brand new franchise term. Instead, they might inherit the remaining years from the previous franchisee's agreement.
It is important for potential Angry Chickz franchisees to understand the implications of this policy when considering purchasing an existing franchise versus starting a new one. If the remaining term is short, the franchisee will soon face the costs and uncertainties of renewal. The franchisee should clarify with Angry Chickz the exact term they would receive under a replacement agreement before completing the purchase.