What constitutes a default of the Chicken Guy Franchise Agreement related to electronic funds transfer?

According to the 2025 Chicken Guy Franchise Disclosure Document, a franchisee's failure to have sufficient funds in their designated bank account for electronic funds transfer constitutes a default of the Franchise Agreement. This is specifically outlined in Section 22.B.(2) of the agreement.

Chicken Guy requires franchisees to participate in an electronic funds transfer program for royalty fee payments and other amounts owed. Franchisees must authorize Chicken Guy to debit their account for these payments. This authorization includes designating a commercial bank account and ensuring sufficient funds are available for withdrawal on the specified due dates.

The implication for a prospective Chicken Guy franchisee is that maintaining adequate funds in the designated account is critical to avoid defaulting on the Franchise Agreement. Failure to do so can lead to termination of the agreement, as per Section 22.B.(2). Franchisees should carefully manage their finances to ensure compliance with this requirement.

This type of electronic funds transfer requirement is common in franchising, as it provides franchisors with a reliable and efficient method for collecting fees. However, franchisees must be diligent in managing their accounts to prevent any unintentional defaults.