When are early termination damages due 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 due within 30 days following the termination of the franchise agreement. This fee is payable if the franchisee defaults on their obligations, leading Chicken Guy to terminate the Franchise Agreement before the initial term expires.
The amount of these damages is calculated based on the average weekly Royalty Fees owed by the franchisee during the one-year period prior to termination. This average is then multiplied by the lesser of 104 weeks or the number of weeks remaining in the term of the Franchise Agreement. This calculation determines the total amount the franchisee must pay as early termination damages.
This clause protects Chicken Guy from financial losses resulting from a franchisee's early departure, ensuring compensation for the unfulfilled term of the agreement. For a prospective franchisee, this highlights the importance of fulfilling the franchise agreement terms to avoid potentially significant termination fees. Franchisees should carefully consider their ability to meet the obligations outlined in the agreement to mitigate the risk of default and subsequent termination damages.