What factors are excluded when determining the purchase price of the assets for Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Further, the Purchase Price for the Assets shall not contain any factor or increment for any trademark, service mark or other commercial symbol used in connection with the operation of the Franchised Restaurant nor any goodwill or "going concern" value for the Franchised Restaurant.
Chicken Guy may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and inventory that are not approved as meeting then-current standards for a Chicken Guy!
Restaurant or for which Franchisee cannot deliver a Bill of Sale in a form satisfactory to Chicken Guy.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the purchase price for the assets of a franchised restaurant will be the fair market value, accounting for depreciation and condition, but also considering the termination of the franchise agreement. However, the determination of the purchase price explicitly excludes certain factors that a franchisee might otherwise expect to be included.
Specifically, the purchase price will not include any value attributed to trademarks, service marks, or other commercial symbols associated with the Chicken Guy brand. This means that the brand recognition and reputation that Chicken Guy has established are not factored into the asset valuation. Additionally, the purchase price will not account for any goodwill or "going concern" value of the restaurant. Goodwill represents the intangible value of a business, such as its customer base and operational efficiency, while "going concern" value refers to the assumption that the business will continue to operate profitably.
Chicken Guy also retains the right to exclude any assets from the purchase that do not meet the brand's current standards or for which the franchisee cannot provide a satisfactory bill of sale. This protects Chicken Guy from acquiring outdated or non-compliant equipment and ensures clear ownership of the assets being purchased. Therefore, franchisees should be aware that the resale value of their restaurant assets back to Chicken Guy will be based on tangible items, without consideration for brand value or the restaurant's potential as an ongoing business.