Besides Section 16, are there any third-party beneficiaries to the Chicken Guy agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
F. Execution of Covenants by Third Parties. At Chicken Guy's request, Developer shall require and obtain the execution of covenants similar to those set forth in this Section 12 (including covenants applicable upon the termination of an individual's relationship with Developer) from all guarantors of Developer's obligations.
Every covenant required by this Section 12.F. shall be in a form satisfactory to Chicken Guy, including, without limitation, specific identification of Chicken Guy as a third
party beneficiary of such covenants with the independent right to enforce them. Failure by Developer to obtain execution of a covenant required by this Section 12.F. shall constitute a material breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, besides Section 16 which covers indemnification, there are other third-party beneficiaries to the agreement. Specifically, Section 12.F discusses covenants required from guarantors of the Developer's (franchisee's) obligations. Chicken Guy is explicitly identified as a third-party beneficiary with the independent right to enforce these covenants.
This means that if a franchisee's obligations are guaranteed by another party, Chicken Guy has the right to directly enforce the covenants against those guarantors. The covenants required by Section 12.F must be in a form satisfactory to Chicken Guy. Failure by the Developer to obtain execution of a covenant required by Section 12.F constitutes a material breach of the agreement.
This clause ensures that Chicken Guy has additional avenues for recourse should the franchisee default on their obligations, strengthening Chicken Guy's position. Prospective franchisees should understand that any guarantors of their obligations will also be bound by certain covenants that Chicken Guy can directly enforce.