Can Angry Chickz require a franchisee to remodel the premises as a condition of the Successor Agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
3.4.3 At Company's request, Franchisee shall, prior to the date of commencement of the Successor Term, have undertaken and completed at its expense, the remodeling, renovation, modernization, or refurbishing of the Premises and the Franchised Business, which may include installation of new or replacement FFE to comply with the Standards for new Restaurants.
3.3.3 If Franchisee fails timely to perform any of the acts, or timely to deliver any of the notices required pursuant to the provisions of Sections 3.3 or 3.4 such failure shall be deemed an election by Franchisee not to exercise its Successor Agreement Right and shall automatically cause Franchisee's Successor Agreement Right to lapse and expire.
3.2.1 Subject to the conditions contained in Section 3.4 and Franchisee's compliance with Section 3.3, at the expiration of the Term hereof, Franchisee shall have the right (the "Successor Agreement Right") to enter into a new franchise agreement on the then-current form generally being offered to prospective franchisees of Company operating under the Marks (the "Successor Franchise Agreement") for two (2) successive five (5) year periods (each a "Successor Term"). Franchisee acknowledges that the terms of the Successor Franchise Agreement, including fees and royalties, will be substantially similar to new franchise agreements granted at the time and may materially differ from those contained in this Agreement.
(a) The first Successor Franchise Agreement shall provide that Franchisee must pay, in lieu of an initial fee, a renewal fee in an amount equal to 25% of the then-current initial franchise fee charged by Company in the state where the Franchised Business is located, but not less than $12,500; and
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, Angry Chickz can require a franchisee to remodel, renovate, modernize, or refurbish the premises and franchised business, including the installation of new or replacement FFE (furniture, fixtures, and equipment), as a condition for entering into a Successor Franchise Agreement. This remodeling must comply with the standards for new Angry Chickz restaurants.
Specifically, the franchisee's right to a Successor Agreement is conditional upon completing these required renovations at their own expense before the commencement of the Successor Term. Failure to perform these renovations, or any other required actions or notices, in a timely manner will result in the franchisee's Successor Agreement Right lapsing and expiring.
This requirement means that franchisees need to be prepared to invest potentially significant capital to update their restaurant to the current brand standards if they wish to renew their franchise agreement. This is in addition to a renewal fee equal to 25% of the then-current initial franchise fee charged by Angry Chickz in the state where the Franchised Business is located, but not less than $12,500.
It is important for prospective franchisees to understand that the terms of the Successor Franchise Agreement, including fees and royalties, may differ materially from those in the original agreement. Therefore, franchisees should carefully consider the potential costs of remodeling and other requirements when evaluating their options for renewal.