What is the minimum unsatisfied judgment amount that would trigger automatic termination of the Angry Chickz franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
d holders shall reexecute a written guaranty in a form prescribed by Company.
ARTICLE 14 DEFAULT AND TERMINATION
- 14.1 General. Company shall have the right to terminate this Agreement only for "cause". "Cause" is hereby defined as a default of this Agreement. Company shall exercise its right to terminate this Agreement in the following circumstances and manners.
- 14.2 Automatic Termination Without Notice. Subject to Applicable Laws of the jurisdiction in which the Franchised Business is operated to the contrary, Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall at Company's election automatically terminate without notice to Franchisee if: (i) Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any contrary provisions of Applicable Law), shall admit to its inability to meet its financial obligations as they become due, or shall make a disposition for the benefit of its creditors; (ii) a judgment against Franchisee in the amount of more than $25,000 remains unsatisfied for a period of more than 30 days (unless an appeal bond has been filed); (iii) the Franchised Business, the Premises, or any of the Assets are seized, taken over or foreclosed by a government official in the exercise of its duties, or seized, taken over, or foreclosed by a creditor or lienholder provided that a final judgment against the Franchisee remains unsatisfied for 30 days (unless an appeal bond has been filed); (iv) a levy of execution or attachment has been made upon the license granted by this Agreement or upon any of the Assets, and it is not discharged within 5 days of such levy or attachment; (v) Franchisee permits any recordation of a notice of mechanics lien against the Franchised Business or
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, a franchisee's agreement can be automatically terminated without notice if a judgment against them exceeds a specific amount and remains unpaid for a certain period. Specifically, if a judgment against the Angry Chickz franchisee is more than $25,000 and remains unsatisfied for over 30 days, Angry Chickz has the right to automatically terminate the franchise agreement. However, this termination is subject to applicable laws of the jurisdiction where the franchised business operates.
This clause in the franchise agreement is significant for potential Angry Chickz franchisees as it highlights the importance of maintaining financial solvency and addressing legal judgments promptly. Failure to do so can lead to the immediate termination of the franchise agreement, resulting in the loss of the business.
It is important to note that the franchisee can prevent automatic termination by filing an appeal bond. This provides a safeguard for franchisees who are contesting a judgment and need time to resolve the matter through the appeals process. Prospective franchisees should carefully consider this provision and ensure they have adequate financial resources and legal support to manage potential judgments against their business.