factual

Can Chicken Guy appoint a manager to control the day-to-day operations of the Chicken Guy restaurant after the Purchase Notice?

Chicken_Guy Franchise · 2025 FDD

Answer from 2025 FDD Document

From the date of Chicken Guy's Purchase Notice until Closing:

  • (1) Franchisee shall operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business and maintain in full force all insurance policies required under this Agreement; and

  • (2) Chicken Guy shall have the right to appoint a manager, at Chicken Guy's expense, to control the day-to-day operations of the Franchised Restaurant, and Franchisee shall cooperate, and instruct its employees to cooperate, with the manager appointed by Chicken Guy.

Alternatively, Chicken Guy may require Franchisee to close the Franchised Restaurant during such time period without removing any Assets from the Franchised Restaurant.

Source: Item 22 — CONTRACTS (FDD page 50)

What This Means (2025 FDD)

According to the 2025 Chicken Guy Franchise Disclosure Document, after Chicken Guy issues a Purchase Notice, it has the right to appoint a manager, at its own expense, to oversee the daily operations of the franchised restaurant. During this period, the franchisee is obligated to cooperate and ensure their employees cooperate with the manager appointed by Chicken Guy. This arrangement remains in effect from the date of the Purchase Notice until the closing date of the purchase.

This clause gives Chicken Guy significant control over the restaurant's operations during the transition period if they decide to purchase the assets. It ensures that Chicken Guy can protect its brand standards and operational procedures leading up to the finalization of the purchase. The franchisee retains the responsibility to operate the restaurant and maintain the assets in the usual course of business and keep all required insurance policies active during this time.

Alternatively, Chicken Guy has the option to require the franchisee to close the restaurant during this period, without removing any assets. This provides Chicken Guy with flexibility in managing the transition, depending on their strategic goals and the specific circumstances of the franchise location. The franchisee should be aware of these possibilities and prepared for either scenario following a Purchase Notice from Chicken Guy.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.