What boundary descriptions might be used to define the perimeters of a Chicken Guy Development Territory?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sign a Development Agreement, you will receive a Development Territory, which will be mutually agreed upon by us and you, taking into consideration the density of the area and the number of Franchised Restaurants you agree to develop. A description of the Development Territory will be included in the Development Agreement. The perimeters of the Development Territory may be described by specific street boundaries, county lines, state lines, municipal boundaries, railroad tracks or other similar boundary descriptions, and the size may range from a portion of a metropolitan area to a county or a state in less densely populated areas. For each Chicken Guy! Restaurant you will develop under the Development Agreement, you must select a site which we approve, based on our then-current site selection criteria we establish from time to time.
The System (including the products sold under the Proprietary Marks) has been developed, and is designed, to function effectively in a wide variety of retail environments, many of which are not practically available to you. Accordingly, under the Development Agreement, we reserve to ourselves the right to: (1) operate, and license others to operate, restaurants identified in whole or in part by the name and mark "Chicken Guy!" in the Development Territory at Nontraditional Locations; (2) award national or regional licenses to third parties to sell products under the name and mark "Chicken Guy!" in foodservice facilities primarily identified by the third party's trademark; (3) develop and operate, and license others to develop and operate, restaurants other than restaurants identified in whole or in part by the name and mark "Chicken Guy!" in the Development Territory; (4) merchandise and distribute products identified by some or all of the Proprietary Marks in the Development Territory through any other method or channel of distribution; and (5) sell and distribute products identified by some or all of the Proprietary Marks in the Development Territory to restaurants other than restaurants identified in whole or in part by the name and mark "Chicken Guy!," provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
Source: Item 12 — TERRITORY (FDD pages 34–36)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the perimeters of a Development Territory, if a franchisee signs a Development Agreement, may be described using various boundary types. These include specific street boundaries, county lines, state lines, municipal boundaries, or railroad tracks. The size of a Development Territory can vary significantly, ranging from a portion of a metropolitan area to an entire county or even a state in less densely populated regions. The Development Territory is mutually agreed upon by Chicken Guy and the franchisee, taking into consideration the density of the area and the number of franchised restaurants the franchisee commits to develop.
It is important to note that even with a Development Territory, Chicken Guy retains significant rights. They can operate or license others to operate Chicken Guy restaurants in nontraditional locations within the Development Territory. They can also award national or regional licenses to third parties to sell Chicken Guy products in foodservice facilities identified by the third party's trademark. Additionally, Chicken Guy can develop and operate other restaurant concepts (not branded as Chicken Guy) within the Development Territory, as well as merchandise and distribute products using the Chicken Guy trademarks through other channels of distribution. They can also sell and distribute Chicken Guy products to other restaurants that are not licensed to use the Chicken Guy trademarks for retail sales.
Prospective franchisees should understand that while they receive a Development Territory, it is not an exclusive territory. Chicken Guy can still operate or license others to operate Chicken Guy restaurants in nontraditional locations, sell Chicken Guy products through other channels, and even operate different restaurant concepts within the territory. This means franchisees may face competition from Chicken Guy itself or other entities licensed by Chicken Guy, even within their Development Territory. The Development Agreement does not grant the franchisee the right to develop or operate more Franchised Restaurants beyond the number specified in the Development Schedule.
Furthermore, the FDD states that there are no minimum sales quotas or other conditions to maintain territorial rights in the Development Territory. However, Chicken Guy may terminate the Development Agreement and the franchisee's territorial rights if the franchisee defaults under the Development Agreement or any Franchise Agreement, including failing to comply with the Development Schedule. This highlights the importance of adhering to the terms of the agreements to maintain the Development Territory rights.