Are there any exceptions to California law governing the Angry Chickz agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
CTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENTS OF THIS WEBSITE MAY BE DIRECTED TO THE OF FINANCIAL PROTECTION AND INNOVATION AT WWW.DFPI.CA.GOV
2. Item 3, Additional Disclosure*.* The following statement is added to Item 3:
Neither Angry Chickz Franchising LLC, nor any person in Item 2 of the disclosure document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling these persons from membership in this association or exchange.
- Item 6, Additional Disclosure. The following statement is added to Item 6:
The maximum interest rate permitted in California is 10% per annum.
- Item 17, Additional Disclosures. The following statements are added to Item 17:
California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning transfer, termination or non-renewal of a franchise. If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
The franchise agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).
The franchise agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
YOU MUST SIGN A GENERAL RELEASE IF YOU RENEW OR TRANSFER YOUR FRANCHISE. CALIFORNIA CORPORATIONS CODE SECTION 31512 VOIDS A WAIVER OF YOUR RIGHTS UNDER THE FRANCHISE INVESTMENT LAW
(CALIFORNIA CORPORATIONS CODE SECTIONS 31000 THROUGH 31505). BUSINESS AND PROFESSIONS CODE SECTION 20010 VOIDS A WAIVER OF YOUR RIGHTS UNDER THE FRANCHISE RELATIONS ACT (BUSINESS AND PROFESSIONS CODE SECTIONS 20000 THROUGH 20043).
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz FDD, there are several instances where California law takes precedence over specific provisions in the franchise agreement. Specifically, California Business and Professions Code Sections 20000 through 20043 grant rights to the franchisee regarding the transfer, termination, or non-renewal of a franchise. If any part of the franchise agreement clashes with this law, California law will prevail.
Additionally, the standard Angry Chickz franchise agreement stipulates termination upon bankruptcy. However, the FDD notes that this provision might not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.). This means that federal law could override the franchise agreement in bankruptcy cases, offering some protection to the franchisee.
Furthermore, the franchise agreement includes a covenant not to compete that extends beyond the termination of the franchise. The FDD explicitly states that this particular provision may not be enforceable under California law. This is a significant point for prospective franchisees, as it suggests that the restrictions on post-termination competition might be limited in California compared to other states. Also, when renewing or transferring a franchise, a general release must be signed; however, California Corporations Code Section 31512 voids a waiver of rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31505), and Business and Professions Code Section 20010 voids a waiver of rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
Finally, the FDD states that no statement, questionnaire, or acknowledgement signed by a franchisee in connection with the commencement of the franchise relationship shall waive any claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.