What is the deadline for Chicken Guy to notify the franchisee of its intent to purchase assets after termination or expiration?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the expiration or termination of this Agreement for any reason, Chicken Guy shall give written notice to Franchisee, within 30 days after the effective date of termination or expiration, if Chicken Guy intends to exercise its option to purchase from Franchisee some or all of the assets used in the Franchised Restaurant ("Assets"). As used in this Section 24, "Assets" shall mean and include, without limitation, leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory (nonperishable products, materials and supplies) used in the Franchised Restaurant, the real estate fee simple or the lease or sublease for the Franchised Location, and any liquor licenses and any other licenses necessary to operate the Franchised Restaurant. Chicken Guy shall have the unrestricted right to assign this option to purchase the Assets. Chicken Guy or its assignee shall be entitled to all customary representations and warranties that the Assets are free and clear (or, if not, accurate and complete disclosure) as to: (1) ownership, condition and title; (2) liens and encumbrances; (3) environmental and hazardous substances; and (4) validity of contracts and liabilities inuring to Chicken Guy or affecting the Assets, whether contingent or otherwise.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, following the termination or expiration of the franchise agreement, Chicken Guy has 30 days to notify the franchisee in writing if it intends to exercise its option to purchase some or all of the assets of the franchised restaurant. These assets may include leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, and inventory such as nonperishable products, materials, and supplies. The assets can also include the real estate or the lease for the location, and any necessary licenses.
This 30-day window is important for franchisees to be aware of, as it dictates the timeline for potentially selling their restaurant's assets back to Chicken Guy. If Chicken Guy exercises this option, it has the right to assign the purchase to another party. Chicken Guy is also entitled to customary representations and warranties that the assets are free and clear of issues related to ownership, condition, title, liens, encumbrances, environmental and hazardous substances, and the validity of contracts.
It is important to note that this clause applies regardless of the reason for termination or expiration of the franchise agreement. Franchisees should understand their obligations and rights regarding the potential sale of assets back to Chicken Guy upon the end of their franchise term.