What is the dependency for Chicken Guy to determine the Protected Area for each Franchised Restaurant under a Development Agreement?

According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee develops restaurants under a Development Agreement, the Protected Area for each franchised restaurant will be determined according to the policies in place when each individual Franchise Agreement is signed. This means that the specific criteria and considerations Chicken Guy uses to define the Protected Area can change over time, even within the same Development Agreement.

This policy has significant implications for franchisees with Development Agreements. The size and shape of the Protected Area around each restaurant could vary depending on when the Franchise Agreement for that specific location is executed. Factors influencing the Protected Area include demographics, population density, number of households, population growth, and the competitive environment. These factors are typical considerations when determining market potential and territorial protection in the franchise industry.

Because Chicken Guy determines the Protected Area based on policies in place at the time each Franchise Agreement is signed, a developer could face uncertainty. The Protected Area for their first location might be different from the Protected Area for their last location, even if those locations are geographically close. This could impact the franchisee's expected market share and revenue potential for later locations.

Prospective franchisees should carefully review the policies in place at the time of each Franchise Agreement and understand how changes in these policies could affect the Protected Area for each of their Chicken Guy restaurants. It would be prudent to discuss with Chicken Guy how these policies have evolved over time and what factors might trigger future changes.