Does the Chicken Guy agreement require a proposed transferee to submit a franchise application?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Transfer Considerations. Developer shall advise Chicken Guy in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee and submit a copy of all contracts and all other agreements or proposals, and all other information requested by Chicken Guy, relating to the proposed Transfer. If Chicken Guy does not exercise its right of first refusal, the decision as to whether or not to approve a proposed Transfer shall be made by Chicken
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a proposed transferee is required to submit a franchise application. Specifically, if a developer intends to transfer their rights and duties under the agreement, they must advise Chicken Guy in writing and ensure that the proposed transferee submits a franchise application.
This requirement allows Chicken Guy to assess the transferee's qualifications, experience, and financial capabilities to ensure they meet the brand's standards. Chicken Guy also reviews the proposed transfer to ensure that the sales price does not jeopardize the transferee's ability to operate the franchise successfully and meet their financial obligations.
Chicken Guy retains the right to approve or disapprove the proposed transfer based on various factors, including the transferee's experience in high-quality restaurant operations, managerial and operational standards, character, business reputation, credit rating, management culture, and financial resources. This comprehensive evaluation process aims to protect the Chicken Guy brand and maintain the quality of its franchised restaurants.
Furthermore, Chicken Guy has the right of first refusal, allowing them to purchase the interest being transferred on the same terms offered by a third party. This provision enables Chicken Guy to maintain control over its franchise network and ensure that any transfer aligns with its strategic interests.