Under the Angry Chickz Area Development Agreement, is the Development Area exclusive, preventing competition from other franchisees or company-owned outlets?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Area Development Agreement, we grant you the right to develop and operate 2 or more Dine-In Restaurants (as defined below) at Venues (as defined below) in a specified area (the "Development Area"), subject to our approval. The Development Area may be one or more cities, counties, states, or
some other defined area. The Development Area will be specified in an exhibit to your Area Development Agreement. During the term of your Area Development Agreement, we will not open or operate, or license others to own or operate, any Dine-In Restaurant in your Development Area, subject to our Reserved Rights (as defined below).
We will determine or accept the location of each Restaurant under the Franchise Agreement at the time each Franchise Agreement is signed, and our then-current standards for accepting sites and determining Protected Areas (defined below) will apply. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
We expressly reserve (our "Reserved Rights") the exclusive, unrestricted right, in our sole and absolute discretion, directly and indirectly:
- a) to develop, own and/or operate and to franchise or license others to own and/or operate (i) Restaurants, the physical location of which are located outside of the Development Area, regardless of proximity to the Development Area, (ii) businesses that provide goods and services within and outside of the Development Area, regardless of proximity to the Development Area under names other than "Angry Chickz," (iii) Restaurants and other businesses at Non-Traditional Venues (defined below) within or outside the Development Area, and regardless of their proximity to any Restaurant developed or under development or consideration by you; and (iv) businesses operating under names other than under our trademarks at any location, and of any type whatsoever, regardless of their proximity to the Development Area and whether or not such businesses use any portion of the System, offer similar products or services or compete with Restaurants;
Source: Item 12 — TERRITORY (FDD pages 33–36)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the Area Development Agreement grants a developer the right to develop and operate two or more Dine-In Restaurants within a specified Development Area, which could be one or more cities, counties, states, or another defined area. During the term of the Area Development Agreement, Angry Chickz will not open, operate, or license others to operate a Dine-In Restaurant in the Development Area, subject to certain Reserved Rights. However, franchisees do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution or competitive brands controlled by Angry Chickz.
Angry Chickz retains significant Reserved Rights, including the right to develop, own, operate, franchise, or license others to operate Restaurants outside the Development Area, regardless of proximity. They can also operate businesses under different names, Restaurants, and other businesses at Non-Traditional Venues (such as airports, casinos, or food courts) within or outside the Development Area. These rights extend to businesses that do not use Angry Chickz's trademarks, even if they offer similar products or services and compete with Angry Chickz Restaurants.
This means that while Angry Chickz agrees not to directly compete with the developer's Dine-In Restaurants within the Development Area under the Angry Chickz brand (excluding Non-Traditional Venues), the developer may still face competition from other franchisees, company-owned locations, or other brands controlled by Angry Chickz. The lack of an exclusive territory and the broad Reserved Rights retained by Angry Chickz are important factors for potential developers to consider. The definition of Non-Traditional Venues is broad, encompassing a wide range of locations where Angry Chickz can operate without restriction, potentially impacting the developer's business.