What is the 'Due Diligence Period' for Chicken Guy after the Purchase Notice?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **F.
Due Diligence Period.** For a period of 30 days after the date of Chicken Guy's Purchase Notice ("Due Diligence Period"), Chicken Guy shall have the right to conduct such investigations as it deems necessary and appropriate to determine: (1) the ownership, condition and title of the Assets; (2) liens and encumbrances on the Assets; (3) environmental and hazardous substances at or upon the Franchised Location; and (4) the validity of contracts and liabilities inuring to Chicken Guy or affecting the Assets, whether contingent or otherwise.
Franchisee will afford Chicken Guy and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operations of the Franchised Restaurant.
- **G.
Chicken Guy's Rights During Due Diligence Period.** During the Due Diligence Period, at its sole option and expense, Chicken Guy may (1) cause the title to the Assets that consist of real estate interests ("Real Estate Assets") to be examined by a nationally recognized title company and conduct lien searches as to the other Assets; (2) procure "AS BUILT" surveys of the Real Estate Assets; (3) procure environmental assessments and testing with respect to the Real Estate Assets; and/or (4) inspect the Assets that consist of leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory ("Fixed Assets") to determine if the Fixed Assets are in satisfactory working condition.
Prior to the end of the Due Diligence Period, Chicken Guy shall notify Franchisee in writing of any objections that Chicken Guy has to any finding disclosed in any title to lien search, survey, environmental assessment or inspection.
If Franchisee cannot or elects not to correct any such title defect, environmental objection or defect in the working condition of the Fixed Assets, Chicken Guy will have the option to either accept the condition of the Assets as they exist or rescind its option to purchase on or before the Closing.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, after Chicken Guy issues a Purchase Notice, they have a 30-day 'Due Diligence Period'. During this period, Chicken Guy has the right to investigate the assets of the franchise to determine ownership, condition, and title, as well as any liens or encumbrances. They can also investigate environmental and hazardous substances at the location, and the validity of contracts and liabilities.
During this 30-day period, Chicken Guy can conduct investigations they deem necessary to assess the franchise's assets. This includes examining real estate titles through a nationally recognized title company, conducting lien searches, procuring surveys and environmental assessments, and inspecting leasehold improvements, equipment, and inventory to ensure they are in satisfactory condition. Franchisees must provide Chicken Guy and its representatives access to the restaurant location for inspections, as long as it doesn't unreasonably interfere with operations.
Chicken Guy must notify the franchisee in writing of any objections they have based on the findings of these investigations before the end of the Due Diligence Period. If the franchisee cannot or chooses not to correct any title defects, environmental issues, or problems with the condition of the fixed assets, Chicken Guy has the option to either accept the assets as they are or rescind their option to purchase the franchise. This due diligence period allows Chicken Guy to thoroughly evaluate the franchise before finalizing the purchase.