What happens to unpaid obligations under the Bb.Q Chicken franchise agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2.6 at the time the successor option is exercised and at the time such successor term commences, all monetary obligations to us and any affiliate of ours must be current and must have been current at all times during the preceding twelve (12) months;
We may also refuse to grant you a successor term for your franchise under other circumstances, including, but not limited to, your failure to substantially comply with the terms of this Agreement, your failure to pay amounts owed to us when due, or your failure to cure of any defaults incurred during the Initial Term, if applicable.
In the event any of your checks are returned, or an or an electronic funds transfer from your bank account is denied, you shall pay to us, in addition to the amount due, a non-sufficient funds fee of One Hundred Dollars ($100). This non-sufficient fund fee is reasonably related to Franchisor's costs resulting from the delayed and declined payment, is not a penalty, and is in addition to any other remedy available to Franchisor under this Agreement.
You shall pay such other fees or amounts described in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
The 2025 Bb.Q Chicken Franchise Disclosure Document addresses the franchisee's monetary obligations in the context of a successor term. To be eligible for a successor term, all monetary obligations to Bb.Q Chicken and its affiliates must be current at the time the successor option is exercised and must have been current for the preceding twelve months. This indicates that maintaining up-to-date payments is crucial for the franchisee to remain in good standing and to be considered for franchise renewal.
Bb.Q Chicken can refuse to grant a successor term if the franchisee fails to pay amounts owed when due or fails to cure any defaults incurred during the initial term. This underscores the importance of timely payments and adherence to the franchise agreement's financial terms. The franchisor's right to deny a successor term due to outstanding payments is a common practice in franchising, designed to protect the brand and ensure that franchisees meet their financial responsibilities.
Additionally, if a franchisee's check is returned or an electronic funds transfer is denied, Bb.Q Chicken will charge a non-sufficient funds fee of $100, in addition to the amount due. This fee covers the costs incurred by Bb.Q Chicken due to the declined payment and is not considered a penalty. The franchisee is also responsible for paying any other fees or amounts described in the franchise agreement. This highlights the franchisee's responsibility to maintain sufficient funds and to cover all financial obligations as outlined in the agreement.