What activities are prohibited under the non-competition covenants during the term of a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 21.C. | No diversion of any business or customer to any competitor; no interest in any restaurant business that that features chicken as a primary menu item (i.e., sales of chicken menu items comprise at least 20% of sales) or whose method of operation or trade dress is similar to that used in the System (subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, during the term of the franchise agreement, franchisees are restricted from certain competitive activities. Specifically, a Chicken Guy franchisee cannot divert business or customers to any competitor.
Additionally, franchisees are prohibited from holding any interest in a restaurant business that features chicken as a primary menu item. A restaurant is considered to have chicken as a primary menu item if sales of chicken menu items comprise at least 20% of the restaurant's sales.
Finally, franchisees are not allowed to have interest in any restaurant business whose method of operation or trade dress is similar to that used in the Chicken Guy system. These non-competition covenants are subject to state law, meaning the specific enforcement and interpretation of these clauses can vary depending on the state in which the franchise operates.