Does Angry Chickz have any restrictions on assigning the Area Development Agreement, as per § 7.1?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Area Development Agreement | Summary | |
|---|---|---|---|
| j. Assignment of contract | § 7.1 | No restriction on our right to assign. | |
| by Us | |||
| k. "Transfer" by you - definition | § 7.3 | Includes sale of assets, transfer of the agreement or change in ownership of a franchisee which is an entity. | |
| l. Our approval of transfer by you | § 7.3 | Transfers require our express written consent, which consent may be withheld for any reason at all in our sole judgment | |
| Provision | Section in Area Development Agreement | Summary | |
| --------------------------------------------------------------------- | --------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | |
| Except as described below, you may not transfer your Area Development Agreement or any Franchise Agreement signed pursuant to the Area Development Agreement except with our written consent and a simultaneous assignment of the Area Development Agreement and all Franchise Agreements signed pursuant to the Area Development Agreement to the same assignee. | |||
| m. Conditions for our approval of transfer | §§ 7.2 and 7.3 | With our written consent, you may transfer a franchise agreement to an entity of which you directly own 100% interest for convenience of ownership. If the new franchisee is a business entity, all holders of a 20% or greater interest in the new franchisee must sign a guaranty. You must reimburse us for all costs and expenses that we incur in connection with such a transfer, including attorneys' fees. At our election, the assignee must sign our then current form of Franchise Agreement for each Restaurant then developed or under development. Before shares of a Franchisee which is a business entity may be offered by private offering, you must provide us with copies of all offering materials; indemnify us, our Affiliates, officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each in connection with the offering; and pay us a non-refundable $10,000 fee to reimburse us for our costs and expenses associated with reviewing the proposed offering. | |
| n. Our right of first | § 7.3 | We can match any offer for your business. | |
| refusal to acquire your |
Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 39–48)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, specifically referencing Section 7.1 of the Area Development Agreement, there are no restrictions on Angry Chickz's right to assign the agreement. However, if the franchisee wishes to assign their Area Development Agreement, the FDD states that transfers require Angry Chickz's express written consent, which can be withheld for any reason at all in their sole judgment.
Furthermore, the document outlines specific conditions related to franchisee transfers. The franchisee may not transfer their Area Development Agreement or any Franchise Agreement signed under it without Angry Chickz's written consent. This transfer must also include a simultaneous assignment of the Area Development Agreement and all Franchise Agreements to the same assignee.
There is an exception, with Angry Chickz's written consent, a franchisee can transfer a franchise agreement to an entity they directly own 100% for ownership convenience. If the new franchisee is a business entity, all holders of a 20% or greater interest in the new franchisee must sign a guaranty. The franchisee must also reimburse Angry Chickz for all costs and expenses incurred during the transfer, including attorney's fees. Angry Chickz can also require the assignee to sign the current Franchise Agreement for each Restaurant developed or under development at their election.
Before shares of a franchisee business entity can be offered via private offering, the franchisee must provide copies of all offering materials to Angry Chickz, indemnify them and related parties, and pay a non-refundable $10,000 fee to cover review costs. Angry Chickz also retains the right of first refusal, allowing them to match any offer for the franchisee's business.