What action can a Chicken Guy franchisee take if the exclusivity provision in the lease is violated?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Exclusive Use: Landlord agrees that Tenant shall have the exclusive right throughout the Term of the Lease to engage in the sale of counter service chicken menu items in the Leased Premises. Tenant agrees that other tenants in the Leased Premises may have chicken on their menus so long as chicken is incidental part of any such other tenant's food sales (less than 20% of gross sales). Landlord agrees that it shall advise other tenants, and any future landlord, of Tenant's exclusivity rights as set forth herein and shall not allow any other party to violate the terms of this exclusivity provision. If a violation occurs, Tenant, in addition to any other rights it may have in law or equity shall have the right to terminate this Lease upon thirty (30) days prior written notice.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if the exclusivity provision in the lease is violated, the franchisee has the right to terminate the lease. Specifically, the franchisee must provide the landlord with thirty days prior written notice before terminating the lease. The lease provision grants the franchisee the exclusive right to sell counter service chicken menu items within the leased premises during the lease term. However, other tenants in the leased premises are allowed to have chicken on their menus as long as it constitutes an incidental part of their food sales, meaning less than 20% of their gross sales.
This clause is designed to protect the Chicken Guy franchisee's core business of selling chicken-based menu items. The landlord is obligated to inform other tenants, including any future landlords, about the franchisee's exclusivity rights and prevent any violations of this provision. This ensures that the franchisee's investment is protected from direct competition within the same location.
It is important for a prospective Chicken Guy franchisee to understand the terms of the lease and the exclusivity provisions. If a violation occurs, the franchisee has a clear course of action, which is to terminate the lease after providing the required notice. This remedy provides a degree of security for the franchisee, allowing them to exit the lease if the landlord fails to uphold the exclusivity agreement. However, the franchisee should also consider seeking legal advice to explore other potential remedies in law or equity, as mentioned in the lease agreement.