If the transferee/assignee executes a replacement franchise agreement for an Angry Chickz franchise, 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 and the new owner executes a replacement franchise agreement, the term of that replacement agreement will be, at Angry Chickz's option, the remaining term of the original agreement, unless Angry Chickz agrees otherwise.
This means that a new franchisee taking over an existing Angry Chickz location might not get a full, new franchise term. Instead, they could inherit the remaining years from the previous franchisee's agreement. This could be shorter or longer than a typical franchise term, depending on where the original franchisee was in their agreement.
For a prospective Angry Chickz franchisee, this highlights the importance of understanding the terms of the existing franchise agreement when considering a transfer. It also emphasizes that the franchisor, Angry Chickz, has the ultimate say in determining the length of the replacement agreement, which could impact the long-term value and potential for renewal.