Can Bb.Q Chicken require the transferee to meet the then-current System-wide Royalty Fee?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) The transferee, at its expense, shall renovate, modernize and otherwise upgrade the Franchised Business and, if applicable, any delivery vehicles to conform to the then-current standards and specifications of the System, and shall complete the upgrading and other requirements which conform to the System-wide standards within the time period reasonably specified by us;
- (h) The transferor shall remain liable for all of the obligations to us in connection with the Franchised Business incurred prior to the effective date of the transfer and shall execute any and all instruments reasonably requested by us to evidence such liability;
- (i) At the transferee's expense, the transferee, the transferee's general manager and/or any other applicable personnel shall complete any training programs then in effect for franchisees upon such terms and conditions as we may reasonably require;
- (j) You shall pay to us a transfer fee equal to one hundred percent (100%) of the then-current initial franchise fee;
- (k) If the transferee is a corporation, limited liability company or a partnership, the transferee shall make and will be bound by any or all of the representations, warranties and covenants set forth at Article 6 as we request. Transferee shall provide to us evidence satisfactory to us that the terms of such Section have been satisfied and are true and correct on the date of transfer.
- 14.2.3 You shall not grant a security interest in the Franchised Business or in any of your assets without our prior written consent, which shall not be unreasonably withheld. In connection therewith, the secured party will be required by us to agree that in the event of any default by you under any documents related to the security interest, we shall have the right and option to be substituted as obligor to the secured party and to cure any default of yours.
- 14.2.4 You acknowledge and agree that each condition which must be met by the transferee is reasonable and necessary to assure such transferee's full performance of the obligations hereunder.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
Based on the 2025 Bb.Q Chicken Franchise Disclosure Document, if you transfer your franchise, the transferee must renovate, modernize, and upgrade the franchised business and any delivery vehicles to meet the then-current system-wide standards and specifications. These upgrades must be completed within a reasonable time frame specified by Bb.Q Chicken.
This requirement ensures that the franchise maintains a consistent brand image and operational standards. For a prospective franchisee, this means that if they plan to sell their Bb.Q Chicken franchise in the future, the potential buyer will need to be prepared to invest in upgrades to meet the current system standards. This could affect the sale price and the pool of potential buyers.
Additionally, the transferor remains liable for all obligations incurred before the transfer date and must execute any instruments to evidence this liability. The transferee must also complete any training programs in effect for franchisees. These conditions are in place to ensure a smooth transition and maintain the quality and consistency of the Bb.Q Chicken brand.
The FDD also states that Bb.Q Chicken deems each condition that must be met by the transferee as reasonable and necessary to assure such transferee's full performance of the obligations. This highlights the importance Bb.Q Chicken places on ensuring that any new franchisee coming into the system is fully capable and committed to upholding the brand's standards.