What is a 'Continuity Group' in the context of a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a corporation, a limited liability company or a partnership, the attached Data Sheet lists those persons whom Chicken Guy and Franchisee have designated as Franchisee's "Continuity Group." In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Franchisee shall execute addenda to the attached Data Sheet to reflect the change.
If Franchisee is a corporation, the Continuity Group shall at all times own at least 51% of the voting securities of Franchisee; if Franchisee is a limited liability company, the Continuity Group shall at all times own at least 51% of the membership interests in Franchisee; and if Franchisee is a partnership, the Continuity Group shall at all times have at least a 51% interest in the operating profits and losses and at least a 51% ownership interest in Franchisee.
F. Guarantees.
(1) All members of the Continuity Group and each of their spouses, if applicable, shall jointly and severally guarantee Franchisee's payment and performance under this Agreement and shall bind themselves to the terms of this Agreement pursuant to the attached Guarantee and Assumption of Franchisee's Obligations ("Guarantee"). Unless Franchisee is a publicly-held entity, all of Franchisee's
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 39–40)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, a 'Continuity Group' is a designated set of individuals listed on the Data Sheet attached to the franchise agreement. This group is relevant if the franchisee is a corporation, limited liability company, or partnership. Any changes to the Continuity Group or the ownership interests of its members must be reflected in addenda to the Data Sheet.
The Continuity Group must collectively maintain a minimum ownership stake in the franchise entity. Specifically, they must own at least 51% of the voting securities if the franchisee is a corporation, at least 51% of the membership interests if the franchisee is a limited liability company, and at least 51% of the interest in operating profits and losses, as well as a 51% ownership interest, if the franchisee is a partnership. This ensures that the individuals initially approved by Chicken Guy retain control over the franchise.
All members of the Continuity Group, along with their spouses if applicable, are required to jointly and severally guarantee the franchisee's payment and performance under the Franchise Agreement. This means they are personally liable for the franchise's obligations. This requirement underscores the importance Chicken Guy places on the commitment and financial responsibility of the Continuity Group members. The franchisor may also require personal financial statements from any guarantor from time to time.
For a prospective Chicken Guy franchisee, understanding the implications of the Continuity Group is crucial. It dictates who must maintain control and financial responsibility within the franchise entity, and any changes require formal documentation and franchisor notification. This structure is designed to ensure stability and adherence to the franchise agreement's terms.