How are early termination damages calculated for a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE(1) | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Early Termination Damages | Amount of the average weekly Royalty Fees that you owed for the one year period prior to termination, multiplied by the lesser of 104 weeks or the number of weeks remaining in the term of the Franchise Agreement | Within 30 days following the termination | Payable if you default on your obligations and we terminate the Franchise Agreement prior to the expiration of the Initial Term. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, early termination damages are calculated based on the average weekly royalty fees owed in the year leading up to the termination. If a franchisee defaults on their obligations and Chicken Guy terminates the Franchise Agreement before the initial term expires, the franchisee must pay these damages.
The amount owed is determined by multiplying the average weekly royalty fees from the previous year by the lesser of 104 weeks or the number of weeks remaining in the franchise term. This means that Chicken Guy aims to recoup royalty fees for a maximum of two years (104 weeks) or for the entire remaining duration of the agreement if it is shorter than two years.
The early termination damages must be paid within 30 days following the termination date. This provision is fairly standard in franchising, as it is designed to compensate the franchisor for lost future revenue and the costs associated with finding a replacement franchisee. Prospective Chicken Guy franchisees should understand this calculation and consider it as a potential liability in the event of a default leading to termination.