Besides other amounts, what continuing fee must a Chicken Guy franchisee pay?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **B.
Royalty Fee.** In addition to all other amounts to be paid by Franchisee to Chicken Guy, Franchisee shall pay Chicken Guy a nonrefundable and continuing royalty fee in the amount specified in the attached Data Sheet, which shall be a percentage of Gross Sales (as defined below) of the Franchised Restaurant, for the right to use the System and the Proprietary Marks at the Franchised Location.
If, due to federal, state or local laws, Chicken Guy is prohibited from receiving a percentage royalty based on alcoholic beverage revenues, Franchisee shall pay Chicken Guy a royalty fee on all Gross Sales except alcoholic beverage revenues in the same dollar amount as would have been paid if Franchisee paid the specified royalty fee percentage on all Gross Sales.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, franchisees must pay a continuing royalty fee. This royalty is a percentage of the Gross Sales from the franchised restaurant and is paid for the right to use the Chicken Guy system and proprietary marks at the restaurant location. The specific percentage is detailed in the Data Sheet attached to the Franchise Agreement.
If federal, state, or local laws prevent Chicken Guy from receiving a percentage royalty based on alcoholic beverage revenues, the franchisee will still pay a royalty fee. This fee will be calculated on all Gross Sales excluding alcoholic beverage revenues, ensuring Chicken Guy receives the same dollar amount as if the royalty was calculated on total Gross Sales.
These royalty fees, along with other amounts owed, are typically collected through an electronic funds transfer program. Franchisees authorize Chicken Guy to debit their commercial bank operating account on a regular schedule. This ensures timely payment and simplifies the process for both the franchisee and Chicken Guy. Franchisees are required to report their Gross Sales, but if they fail to do so, Chicken Guy will estimate the sales and transfer an appropriate amount from the franchisee's account.