What is the dependency for transfer fees to be collectable for a Chicken Guy franchise in Washington?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
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- Questionnaires and Acknowledgments. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
This provision supersedes any other term of any document executed in connection with the franchise.
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- Prohibitions on Communicating with Regulators. Any provision in the franchise agreement or related agreements that prohibits the franchisee from communicating with or complaining to regulators is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h).
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- Advisory Regarding Franchise Brokers. Under the Washington Franchise Investment Protection Act, a "franchise broker" is defined as a person that engages in the business of the offer or sale of franchises. A franchise broker represents the franchisor and is paid a fee for referring prospects to the franchisor and/or selling the franchise. If a franchisee is working with a franchise broker, franchisees are advised to carefully evaluate any information provided by the franchise broker about a franchise.
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- Surety Bond. The following language is added to the end of Section 7.A. of the Franchise Agreement:
A surety bond in the amount of $100,000 has been obtained by Chicken Guy. The Washington Securities Division has made the issuance of Chicken Guy's permit contingent upon Chicken Guy maintaining surety bond coverage acceptable to the Administrator until (a) all Washington franchisees have (i) received all initial training that they are entitled to under the Franchise Agreement or Chicken Guy's franchise disclosure document, and (ii) are open for business; or (b) the Administrator issues written authorization to the contrary.
Except as expressly modified by this Addendum, the Franchise Agreement remains unmodified and in full force and effect.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
The 2025 Chicken Guy FDD includes addenda that modify the franchise and development agreements for franchisees in certain states. For Washington, the FDD states that any provisions in the franchise agreement or elsewhere are void and unenforceable in Washington. This includes provisions related to questionnaires and acknowledgements, prohibitions on communicating with regulators and surety bonds.
Specifically, the Washington addendum addresses items such as franchisee questionnaires, acknowledgments, and prohibitions on communication with regulators. It also discusses a surety bond that Chicken Guy has obtained, with the Washington Securities Division making the issuance of Chicken Guy's permit contingent upon maintaining this bond. The bond remains in effect until all Washington franchisees have completed initial training and are open for business, or until the Administrator issues written authorization to the contrary.
However, the addendum does not explicitly address the collectability of transfer fees. A prospective Chicken Guy franchisee in Washington should consult with a legal expert to fully understand the implications of Washington state law on the franchise agreement, especially regarding fees, waivers, and dispute resolution.