What is the requirement regarding the good standing of the Subsidiary in its jurisdiction of organization for an Angry Chickz developer?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2.2 Notwithstanding Section 7.2.1, Developer may, with Company's prior written consent, execute and contemporaneously assign a Franchise Agreement executed pursuant hereto to a separate Entity controlled by Developer (each a "Subsidiary"); provided and on condition that:
- (a) Upon Company's request, Developer has delivered to Company a true, correct and complete copy of the Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, partnership agreement, and other organizational documents, and Company has accepted the same;
- (b) The Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, and partnership agreement, as applicable, shall provide that its activities are confined exclusively to operating Restaurant;
- (c) Developer, directly owns and controls not less than 100% of the Equity and voting rights of the Subsidiary;
- (d) the Subsidiary is in good standing in its jurisdiction of organization and each other jurisdiction where the conduct of its business or the operation of its properties requires it to be so qualified;
- (e) the person designated by Developer as the Operating Principal has exclusive day-to-day operational control over the Subsidiary;
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if a developer seeks to assign a Franchise Agreement to a separate entity (a Subsidiary) controlled by the developer, the Subsidiary must be in good standing in its jurisdiction of organization. This requirement extends to each jurisdiction where the Subsidiary's business operations or property ownership necessitates qualification. This condition is one of several that must be met for Angry Chickz to grant prior written consent for such an assignment.
In practical terms, this means that the Subsidiary must be properly registered and compliant with all applicable laws and regulations in the state or country where it is formed and where it conducts business. This includes, but is not limited to, maintaining up-to-date filings, paying all required taxes and fees, and adhering to all relevant licensing requirements. Failure to maintain good standing could prevent the developer from assigning the Franchise Agreement to the Subsidiary.
This requirement is a standard practice in franchising, as it ensures that any entity operating an Angry Chickz franchise meets the legal and regulatory standards of its operating environment. It protects the Angry Chickz brand by ensuring that its franchisees are responsible and compliant business operators. A prospective Angry Chickz developer should ensure that any Subsidiary they plan to use for operating a franchise is and remains in good standing to avoid any complications with the assignment of the Franchise Agreement.