What action must a Chicken Guy franchisee take in the event of any change in the Continuity Group?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a corporation, a limited liability company or a partnership, the attached Data Sheet lists those persons whom Chicken Guy and Franchisee have designated as Franchisee's "Continuity Group." In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Franchisee shall execute addenda to the attached Data Sheet to reflect the change.
If Franchisee is a corporation, the Continuity Group shall at all times own at least 51% of the voting securities of Franchisee; if Franchisee is a limited liability company, the Continuity Group shall at all times own at least 51% of the membership interests in Franchisee; and if Franchisee is a partnership, the Continuity Group shall at all times have at least a 51% interest in the operating profits and losses and at least a 51% ownership interest in Franchisee.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if there is any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, the franchisee must execute addenda to the attached Data Sheet to reflect the change. The Continuity Group is defined as those persons whom Chicken Guy and the franchisee have designated as the franchisee's "Continuity Group."
For franchisees structured as a corporation, the Continuity Group must own at least 51% of the voting securities. If the franchisee is a limited liability company, the Continuity Group must maintain ownership of at least 51% of the membership interests. For partnerships, the Continuity Group needs to hold at least a 51% interest in the operating profits and losses, as well as a 51% ownership interest in the franchise.
This requirement ensures that the individuals initially approved by Chicken Guy maintain significant control and ownership in the franchise, safeguarding the brand's standards and operational consistency. Prospective franchisees should carefully consider the implications of these ownership requirements and the process for documenting changes within the Continuity Group, as failure to comply could potentially lead to breaches of the franchise agreement.