What is the 'Successor Term' in the context of an Angry Chickz franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, a Successor Term refers to the option a franchisee has to renew their franchise agreement under certain conditions. Specifically, upon the expiration of the initial franchise term, a franchisee in good standing has the right to enter into a new franchise agreement. This new agreement, termed the "Successor Franchise Agreement," allows the franchisee to continue operating their Angry Chickz restaurant for two successive five-year periods. Each of these five-year extensions is defined as a "Successor Term."
However, the FDD stipulates that the terms of the Successor Franchise Agreement, including fees and royalties, may differ significantly from the original agreement and will be substantially similar to those in new franchise agreements offered at that time. This means that an Angry Chickz franchisee should anticipate potential changes in costs and operational requirements when considering a renewal.
To exercise the Successor Agreement Right, the franchisee must notify Angry Chickz in writing between 9 and 12 months before the end of the initial term. They must also execute and return the Successor Franchise Agreement within 30 days of receiving Angry Chickz's franchise disclosure document, if applicable. Failure to meet these deadlines or any of the conditions outlined in Section 3.4 of the franchise agreement results in the forfeiture of the renewal option. These conditions include being in good standing, compliance with training and certification requirements, and completing any required remodeling or renovations to meet current brand standards. Additionally, the franchisee must provide a general release of claims against Angry Chickz.