What is the consequence if a Chicken Guy franchisee fails to begin construction or renovation by the Construction Commencement Deadline?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Termination Without Cure Period. In addition to the grounds for termination that may be stated elsewhere in this Agreement, Chicken Guy may terminate this Agreement, and the rights granted by this Agreement, upon written notice to Franchisee without an opportunity to cure upon the occurrence of any of the following events:
- (1) Franchisee fails to obtain site approval before the Site Approval Deadline.
- (2) Franchisee fails to begin construction or renovation of the Franchised Restaurant on or before the Construction Commencement Deadline.
- (3) Franchisee fails to open the Franchised Restaurant for business on or before the Opening Deadline. Chicken Guy may, in its sole discretion, extend this period to address unforeseen construction delays that are not within Franchisee's control.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, if a franchisee fails to begin construction or renovation of their franchised restaurant by the Construction Commencement Deadline, Chicken Guy has the right to terminate the Franchise Agreement without providing an opportunity for the franchisee to correct the failure. This is a significant risk for prospective franchisees, as failure to meet this deadline can result in the loss of the franchise.
This term is time-sensitive and strict. Franchisees should be aware of the Construction Commencement Deadline outlined in the Data Sheet and proactively manage their construction or renovation timelines to ensure they meet this critical milestone. Delays due to unforeseen circumstances, other than those constituting Force Majeure, will not excuse a failure to meet the deadline.
Franchisees should seek clarification from Chicken Guy regarding the specific requirements for demonstrating commencement of construction or renovation. They should also confirm what documentation or evidence is required to prove that construction has begun by the deadline. Understanding these requirements is crucial for avoiding potential termination of the Franchise Agreement.