If revenue to Angry Chickz is modified or disallowed by legislation, can Angry Chickz increase royalty rates?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Should it ever be determined that any supply chain or any other contractual included revenue to Company or its Affiliates is modified or disallowed by legislation, regulation or other means, the parties agree that Company, in its sole and exclusive determination may increase royalty rates and other means to compensate for that lost revenue.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if legislation, regulation, or other means modify or disallow any supply chain or other contractual revenue to Angry Chickz or its affiliates, Angry Chickz can increase royalty rates. The FDD states that Angry Chickz can make this determination at its "sole and exclusive determination" to compensate for that lost revenue.
This clause in the franchise agreement means that if a new law or regulation reduces the revenue that Angry Chickz receives from its supply chain or other contracts, Angry Chickz has the right to increase the royalty fees that franchisees pay. This is designed to protect Angry Chickz's income and ensure that it can continue to operate profitably, even if external factors negatively impact its revenue streams.
For a prospective Angry Chickz franchisee, this clause represents a potential risk. While the initial royalty rate might seem reasonable, there is a possibility that it could increase due to circumstances beyond the franchisee's control. It would be prudent for a potential franchisee to seek clarification on what specific types of revenue modifications could trigger a royalty rate increase and whether there are any caps or limitations on such increases.