What section of the Angry Chickz franchise agreement outlines the conditions for automatic termination without notice?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
er or assignment of an interest in Franchisee, or other change in ownership interests in Franchisee, and at any other time upon Company's request, said 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, Section 14.2 of the franchise agreement details the conditions under which the franchise can be automatically terminated without notice.
Specifically, Angry Chickz can terminate the agreement without notice if the franchisee is adjudicated bankrupt or judicially determined to be insolvent, admits to an inability to meet financial obligations, or makes an asset disposition for the benefit of creditors. Termination without notice can also occur if a judgment exceeding $25,000 against the franchisee remains unsatisfied for more than 30 days (unless an appeal bond has been filed).
Further conditions leading to automatic termination include the seizure of the franchised business, premises, or assets by a government official, creditor, or lienholder, particularly if a final judgment against the franchisee remains unsatisfied for 30 days (again, unless an appeal bond is filed). A levy of execution or attachment on the franchise license or assets that isn't discharged within 5 days, permitting a mechanic's lien against the business that isn't released within 60 days, allowing a judgment against Angry Chickz or its affiliates due to the franchisee's operations, or a condemnation or transfer in lieu of condemnation can also trigger automatic termination.
These terms are typical in franchise agreements to protect the franchisor's brand and interests in cases of severe financial distress or legal issues involving the franchisee. A prospective Angry Chickz franchisee should carefully review these conditions to understand the circumstances that could lead to an immediate loss of their franchise rights.