After the Chicken Guy agreement terminates, can Chicken Guy operate or license others to operate Chicken Guy restaurants at any location?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) This Section 1.B. does not prohibit Chicken Guy or its affiliates from: (a) operating, and licensing others to operate, during the term of this Agreement, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" at any location outside of the Protected Area; (b) operating, and licensing others to operate, after this Agreement terminates or expires, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" at any location; and (c) operating, and licensing others to operate, at any location, during the term of this Agreement or after this Agreement terminates or expires, any type of restaurant other than a restaurant identified in whole or in part by the name and mark "CHICKEN GUY!"
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, Chicken Guy has the right to operate or license others to operate Chicken Guy restaurants at any location after the franchise agreement terminates or expires. This means that upon the end of the agreement, Chicken Guy is not restricted from opening or franchising new locations, even in areas where the franchisee previously had rights.
This clause is significant for prospective franchisees as it clarifies that the limited exclusivity granted during the term of the agreement does not extend beyond the agreement's termination. Chicken Guy retains full control over its brand and can expand its presence without limitations once the franchise agreement concludes. This is a standard practice in franchising, allowing the franchisor to maintain flexibility in its growth strategy.
For a potential Chicken Guy franchisee, this highlights the importance of maximizing the benefits of the franchise during its term, as the franchisor has no long-term restrictions on competition after the agreement ends. Franchisees should focus on building a strong customer base and brand loyalty within their protected area to mitigate potential competition from Chicken Guy or other franchisees in the future.