What kind of covenants must an Angry Chickz Developer obtain from Restricted Persons?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **5.
Covenant Not to Sue.** Franchisee and Guarantors (on behalf of Releasors) covenant not to initiate, prosecute, encourage, assist, or (except as required by law) participate in any civil, criminal, or administrative proceeding or investigation in any court, agency, or other forum, either affirmatively or by way of cross-claim, defense, or counterclaim, against any person or entity released under Section 1 with respect to any Claim released under Section 1.
- **6.
Complete Defense.** Franchisee and Guarantors: (a) acknowledge that the release in Section 1 shall be a complete defense to any Claim released under Section 1; and (b) consent to the entry of a temporary or permanent injunction to prevent or end the assertion of any such Claim.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz FDD, franchisees and guarantors must agree to a covenant not to sue. This covenant requires them to refrain from initiating, prosecuting, encouraging, assisting, or participating in any legal proceedings against individuals or entities released under Section 1 of the agreement, unless required by law. This includes civil, criminal, or administrative actions in any court, agency, or forum, whether pursued affirmatively or as a defense or counterclaim.
This covenant is a significant obligation for the franchisee and any guarantors, as it restricts their ability to seek legal recourse for any claims released under Section 1. The franchisee and guarantors acknowledge that the release in Section 1 serves as a complete defense against any claim released therein and consent to injunctive relief to prevent or stop any such claim from being asserted.
This requirement is intended to protect Angry Chickz and related parties from future legal challenges related to the released claims. Prospective franchisees should carefully review Section 1 and understand the scope of the claims being released and the implications of the covenant not to sue before signing the agreement. They should also seek legal counsel to fully understand their rights and obligations under this provision.