Can Angry Chickz require a franchisee to resell items not uniquely identified with the franchisor?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) A provision that permits a Franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration, of the franchisee's inventory, supplies, equipment, fixtures, and furnishings.
Personalized materials which have no value to the Franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation.
This subsection applies only if: (i) the term of the franchise is less than 5 years; and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of Franchisor's intent not to renew the franchise.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
Based on the 2025 Angry Chickz Franchise Disclosure Document, an addendum for the state of Michigan addresses the repurchase of a franchisee's inventory, supplies, equipment, fixtures, and furnishings upon termination or non-renewal of the franchise agreement. Specifically, Angry Chickz is not required to compensate the franchisee for personalized materials that have no value to them, or for inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business.
This provision applies only if two conditions are met: first, the term of the franchise is less than 5 years; and second, the franchisee is either prohibited from continuing a similar business under a different brand in the same area after the franchise expires, or the franchisee does not receive at least 6 months' advance notice of Angry Chickz's intent not to renew the franchise.
In practical terms, this means that if a franchisee's agreement is terminated or not renewed, Angry Chickz is only obligated to repurchase items that are essential to running the franchise and have value to them. Items that are personalized or not reasonably required for the business do not need to be repurchased. This could impact the franchisee's ability to recoup their initial investment if a significant portion of their assets fall into these categories.
Prospective Angry Chickz franchisees should carefully consider the implications of these conditions, especially if the franchise term is less than 5 years. It would be prudent to discuss with Angry Chickz what constitutes 'personalized materials' or items 'not reasonably required' to fully understand potential financial risks upon termination or non-renewal.