Can Angry Chickz withhold consent for assignment of the Development Agreement, and if so, under what conditions?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
7.3.1 This Agreement has been entered into by Company in reliance upon and in consideration of the singular personal skill, qualifications and trust and confidence reposed in Developer. Neither Developer nor any Owner shall cause or permit any Assignment unless Developer shall have obtained Company's prior written consent, which consent may be withheld for any reason whatsoever in Company's judgment or for no reason at all, and shall comply with Company's right of first refusal pursuant to Section 7.3.4. Except as provided in Section 7.2.2, Developer acknowledges and agrees that it will not be permitted to make an Assignment of this Agreement or sell, gift, convey, assign or transfer the assets used in any of the Restaurants developed hereunder or any Franchise Agreement executed pursuant to this Agreement except in conjunction with a concurrent Assignment to the same approved assignee of all of the assets used in all of said Restaurants, and all of the Franchise Agreements executed pursuant to this Agreement or at Company's election the execution by the assignee of new Franchise Agreements on Company's Then-current form for each of the Restaurants then developed or under development by Developer, and otherwise in accordance with the terms and conditions of Developer's Franchise
Agreement(s). If Developer is an Entity, Developer shall promptly provide Company with written notice (stating such information as Company may from time to time require) of each and every transfer, assignment, encumbrance, gift and other conveyance, voluntarily or involuntarily, in whole or in part, by operation of Applicable Law or otherwise by any Owner of any direct or indirect Equity or voting rights in Developer, notwithstanding that the same may not constitute an "Assignment" as defined by this Agreement.
- 7.3.2 Developer shall not, directly, or indirectly, pledge, encumber, hypothecate or otherwise grant any third party a security interest in this Agreement in any manner whatsoever without the prior express written consent of Company.
To the extent that the foregoing prohibition may be ineffective under Applicable Law, Developer shall provide not less than 10 days prior written notice (which notice shall contain the name and address of the secured party and the terms of such pledge, encumbrance, hypothecation or security interest) of any pledge, encumbrance, hypothecation or security interest in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, Angry Chickz can withhold consent for the assignment of the Area Development Agreement. The agreement has been entered into by Angry Chickz based on the developer's personal skills, qualifications, trust, and confidence.
The FDD states that neither the developer nor any owner can permit any assignment unless they have obtained Angry Chickz's prior written consent. This consent can be withheld for any reason whatsoever in Angry Chickz's judgment, or for no reason at all. The developer must also comply with Angry Chickz's right of first refusal.
The developer cannot pledge, encumber, or grant any third party a security interest in the Area Development Agreement without Angry Chickz's prior express written consent. If this prohibition is ineffective under applicable law, the developer must provide at least 10 days prior written notice to Angry Chickz, including the name and address of the secured party and the terms of the security interest.