What conditions must a Chicken Guy Developer meet to prevent Chicken Guy from operating or licensing others to operate Chicken Guy restaurants in the Development Territory during the Development Term?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Section 2 does not prohibit Chicken Guy or its affiliates from: (1) operating, and licensing others to operate, during the Development Term, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" at any location outside of the
Development Territory; (2) 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 (3) operating, and licensing others to operate, at any location, during or after the Development Term, any type of restaurant other than a restaurant identified in whole or in part by the name and mark "CHICKEN GUY!"
C. The restrictions contained in this Section 2 apply only to Chicken Guy and do not apply to restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" under construction or in operation in the Development Territory as of the date of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Section 2 outlines the limited exclusive rights granted to a developer. Chicken Guy or its affiliates are not prohibited from operating or licensing others to operate restaurants identified by the Chicken Guy name outside of the Development Territory during the Development Term. After the agreement terminates or expires, Chicken Guy can operate or license others to operate Chicken Guy restaurants at any location. Chicken Guy is also allowed to operate or license other types of restaurants that are not Chicken Guy restaurants at any location during or after the Development Term.
These restrictions apply only to Chicken Guy and do not affect any Chicken Guy restaurants under construction or in operation within the Development Territory as of the date of the agreement. This means that existing restaurants are grandfathered in and not subject to the exclusivity provisions.
In practical terms, a Chicken Guy developer's exclusive rights are limited to a specific geographic area and time frame. The developer needs to be aware that Chicken Guy can expand outside the territory and after the agreement ends, even within the territory. This highlights the importance of understanding the Development Agreement's terms and strategically developing the territory to maximize the opportunity during the Development Term.