Is Angry Chickz liable to the franchisee for losses or costs resulting from a Crisis Management Event?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.5.2 Upon the occurrence of a Crisis Management Event, Franchisee shall immediately inform Company by telephone and email (or other electronic messaging medium authorized by Company for this purpose). Franchisee shall cooperate fully with Company with respect to Company's response to the Crisis Management Event. In the event of the occurrence of a Crisis Management Event, Company may require Franchisee to temporarily cease operating the Franchised Business and/or establish emergency processes and procedures pursuant to which Company may require Franchisee to take other actions or refrain from taking certain actions. Company shall not be liable to Franchisee for any losses or costs, including consequential damages or loss profits occasioned thereby by any closure or processes or procedures instituted as a result of a Crisis Management Event.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, Angry Chickz is not liable to the franchisee for any losses or costs resulting from a Crisis Management Event.
Specifically, the FDD states that in the event of a Crisis Management Event, Angry Chickz may require the franchisee to temporarily cease operating the franchised business and/or establish emergency processes and procedures. The agreement explicitly states that Angry Chickz will not be held liable for any losses or costs incurred by the franchisee due to any closure, processes, or procedures implemented as a result of the Crisis Management Event. This includes consequential damages or lost profits.
This means that if a crisis occurs that forces the franchisee to close or modify operations, the franchisee bears the financial risk. This is a significant risk factor for prospective franchisees to consider. It is important to understand what constitutes a Crisis Management Event according to the franchise agreement and to assess the potential financial impact of such an event on the business.
Franchisees should carefully review the definition of "Crisis Management Event" in the franchise agreement and consider obtaining business interruption insurance to mitigate potential losses. It would also be prudent to discuss with Angry Chickz what types of support or assistance they might offer during a crisis, even though they are not legally obligated to provide financial compensation.