How must the Initial Development Fee be paid to Angry Chickz?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
f any document executed in connection with the franchise.
- The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
ADDENDUM TO ANGRY CHICKZ FRANCHISING LLC FRANCHISE AGREEMENT
(State of California)
| THIS ADDENDUM is entered into as of, 20 between ANGRY | |
|---|---|
| CHICKZ FRANCHISING LLC, a California limited liability company ("Company"), and , a ("Franchisee"), with reference to the | |
| following: | |
| 1. | Payment of all initial fees payable under the Franchise Agreement is deferred until |
| and Franchisee's Angry Chickz business opens to the public. | Franchisor has satisfied its pre-opening obligations to Franchisee under the Franchise Agreement |
| 2. opens to the public. | Notwithstanding anything to the contrary set forth in the Franchise Agreement, and in particular Section 5.1 thereof, Franchisee shall pay the Initial Franchise Fee to Company when Company has fulfilled its initial obligations to Franchisee and Franchisee's Angry Chickz business |
| 3. | Except as set forth herein, the Franchise Agreement shall be valid and enforceable |
| between the parties in accordance with its terms. | |
| Addendum as of the Effective Date identified below. | IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this |
| "Company" | "Franchisee" |
| ANGRY CHICKZ FRANCHISING LLC, | , |
| a California limited liability company | [ ] an individual [ ] a general partnership; |
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the payment terms for the initial development fee vary based on the location of the franchise. For franchisees in California, Angry Chickz will defer the payment of the development fee for each location until that specific location opens for business. This means a developer in California doesn't have to pay the development fee upfront but rather when each individual Angry Chickz restaurant is ready to begin operations.
For franchisees in Virginia, Illinois, and Maryland, the payment of all initial fees, including the development fee, is deferred until Angry Chickz has met its pre-opening obligations and the franchisee's first Angry Chickz business opens to the public. This deferral is particularly important in Illinois and Maryland due to the franchisor's financial condition, as mandated by the Illinois Attorney General's Office and the Maryland Securities Commissioner, respectively. This provides a level of financial security for new franchisees in these states.
This deferral of fees until certain conditions are met is not a universal practice in franchising, as many franchisors require upfront payment of initial fees. The specific requirements imposed by California, Virginia, Illinois, and Maryland reflect regulatory oversight aimed at protecting franchisees, especially when there are concerns about the franchisor's financial stability. Prospective Angry Chickz franchisees should carefully note which addendum applies to their specific location and understand the conditions under which their initial fees become due.