What documents must a Chicken Guy franchisee submit to Chicken Guy when proposing a transfer?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall advise Chicken Guy in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee, and submit a copy of all contracts and all other agreements or proposals, and all other information requested by Chicken Guy, relating to the proposed Transfer. If Chicken Guy does not exercise its right of first refusal, the decision as to whether or not to approve a proposed Transfer shall be made by Chicken Guy in its reasonable business discretion and shall include numerous factors deemed relevant by Chicken Guy. These factors may include, but will not be limited to, the following:
In addition to the requirements of Section 19.B., prior to the time that any public offering or private placement of securities or partnership interests in Franchisee is made available to potential investors, Franchisee, at its expense, shall deliver to Chicken Guy a copy of the offering documents.
Franchisee, at its expense, also shall deliver to Chicken Guy an opinion of Franchisee's legal counsel and an opinion of one other legal counsel selected by Chicken Guy (both of which shall be addressed to Chicken Guy and in a form acceptable to Chicken Guy) that the offering documents properly use the Proprietary Marks and accurately describe Franchisee's relationship with Chicken Guy and/or its affiliates.
- **C.
Conditions of Transfer.** If Chicken Guy approves a proposed Transfer, prior to the Transfer becoming effective:
(1) The transferor shall pay Chicken Guy a nonrefundable Transfer fee in the amount of $10,000 in connection with Chicken Guy's review of the Transfer application.
(2) Franchisee and the proposed transferee shall execute, at Chicken Guy's election, either an assignment agreement and any amendments to this Agreement deemed necessary or desirable by Chicken Guy to reflect the Transfer or Chicken Guy's then-current standard form of franchise agreement for an initial term ending on the expiration date of the Initial Term of this Agreement.
In either event, a guarantee of the type required by Section 17.F. shall be executed by those individuals identified in Section 17.F.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, a franchisee must inform Chicken Guy in writing of any proposed transfer. The franchisee must submit a franchise application for the proposed transferee, along with copies of all contracts, agreements, proposals, and any other information Chicken Guy requests related to the transfer.
Chicken Guy's decision to approve a transfer is based on its reasonable business discretion, considering factors it deems relevant. These factors include the transferee's experience in high-quality restaurant operations, meeting Chicken Guy's standards for a franchisee, possessing a good character, business reputation, and credit rating, having a compatible management culture, and having adequate financial resources. The sales price must not jeopardize the transferee's ability to operate the restaurant and meet financial obligations.
Prior to any public offering or private placement of securities, the franchisee must provide Chicken Guy with a copy of the offering documents at their own expense. Additionally, the franchisee must deliver opinions from their legal counsel and another counsel selected by Chicken Guy, both addressed to Chicken Guy, confirming that the offering documents properly use the proprietary marks and accurately describe the relationship with Chicken Guy.
If Chicken Guy approves a proposed transfer, the transferor must pay a nonrefundable transfer fee of $10,000. The franchisee and the proposed transferee must execute either an assignment agreement and any necessary amendments or Chicken Guy's current standard franchise agreement. The individuals identified in Section 17.F must also execute a guarantee.