Following termination or expiration of the Chicken Guy franchise agreement, are franchisees and related parties still bound by the covenants in Section 21?

According to Chicken Guy's 2025 Franchise Disclosure Document, franchisees and related parties are still bound by the covenants in Section 21 following the termination or expiration of the franchise agreement. Specifically, Franchisee and all persons and entities subject to the covenants contained in Section 21 must continue to abide by those covenants and must not, directly or indirectly, take any action that violates those covenants.

This means that even after the franchise agreement ends, the franchisee and related parties (such as guarantors) must still adhere to the restrictions outlined in Section 21. These restrictions likely include non-compete clauses, confidentiality agreements, and other obligations designed to protect Chicken Guy's interests. The restrictions for guarantors apply for a 1 year period after any guarantor ceases to be the Operating Principal or an officer, stockholder, director, member of the Continuity Group or a 10% Owner.

This continued obligation is a standard practice in franchising to protect the brand and prevent former franchisees from using confidential information or competing unfairly with the franchisor. Franchisees should carefully review Section 21 to understand the specific restrictions that will remain in effect after the franchise agreement ends. Franchisees should also note that Chicken Guy has the right to modify the scope of any covenant in Section 21 effective immediately upon the franchisee's receipt of written notice.