How does the Chicken Guy Addendum affect releases required as a condition of renewal, sale, or assignment/transfer for North Dakota franchisees?

According to the 2025 Chicken Guy Franchise Disclosure Document, the addendum for North Dakota franchisees modifies the standard franchise agreement regarding required releases. Specifically, any release required as a condition of renewal, sale, or assignment/transfer will not apply if such application is prohibited by the North Dakota Franchise Investment Law. This provision is added to Sections 2.B.(2)(e), 19.B.(5), and 20 of the Franchise Agreement. This modification is put in place because the offer or sale of a Chicken Guy franchise was made in North Dakota, the franchisee is a resident of North Dakota, and/or the franchised restaurant will be located and/or operated in North Dakota.

For a prospective Chicken Guy franchisee in North Dakota, this means that the standard requirement to sign a release when renewing the franchise agreement or when selling or transferring the franchise is subject to the limitations of North Dakota law. The franchisee will not be bound by a release if the North Dakota Franchise Investment Law prohibits it. This offers a degree of protection to the franchisee, ensuring that they do not inadvertently waive rights granted to them under North Dakota law during these critical junctures of the franchise relationship.

This type of addendum is common in franchise agreements to address specific state laws that may differ from federal law or the laws of the state where the franchisor is headquartered. It reflects an effort by Chicken Guy to comply with North Dakota regulations and to ensure that franchisees in that state are not subject to terms that violate local law. Franchisees should consult with legal counsel to fully understand their rights and obligations under North Dakota's Franchise Investment Law, especially concerning releases related to renewal, sale, or transfer of the franchise.