Does the Chicken Guy franchise agreement require arbitration or litigation to be conducted outside of the franchisee's state?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
ou should read these provisions in the agreements attached to this disclosure document.**
DEVELOPMENT AGREEMENT
| PROVISION | SECTION IN DEVELOPMENT AGREEMENT | SUMMARY |
|---|---|---|
| a. Length of the development term | Section 1.A. | The term is from the date of execution of the Development Agreement to the date that you sign a lease or purchase the site for the last Franchised Restaurant that you are required to develop under the Development Schedule. |
| PROVISION | SECTION IN DEVELOPMENT AGREEMENT | SUMMARY |
| r. Non-competition covenants after the franchise is terminated or expires | Section 12.C. | No activity as described in q. above for one year within your Development Territory, within two miles of its border and within two miles of any then- existing Chicken Guy! Restaurant. If you violate the post-termination non-competition provisions, you must pay liquidated damages equal to our then- current Initial Franchise Fee and 8% of the Gross Sales of the competing business until the expiration of the non-competition period (subject to state law). |
| s. Modification of the | Section 20 | No modification generally without signed |
| agreement | agreement, but we may modify the System. | |
| t. Integration/merger clause | Section 20 | Only the terms of the Development Agreement are binding (subject to state law). Any representations or promises made outside this disclosure document and the Development Agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation | Sections 22A. & B. | Subject to state law, either party will submit any claim, controversy, or dispute arising out of the agreement to non-binding mediation and, thereafter, to arbitration. The mediation and arbitration will take place in the city where our principal offices are located at the time the demand for mediation or arbitration is filed, which is currently Orlando, Florida. |
| v. Choice of forum | Section 22.D. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the franchise agreement outlines specific conditions regarding the location of dispute resolution processes. For franchisees in Illinois, any provision that designates jurisdiction and venue outside of Illinois is void. However, the agreement can stipulate that arbitration occurs outside of Illinois. For franchisees in Minnesota, Minnesota statutes prohibit Chicken Guy from requiring litigation to be conducted outside of Minnesota.
For all other franchisees, the Chicken Guy franchise agreement states that, subject to state law, either party must submit any claim, controversy, or dispute to non-binding mediation and, thereafter, to arbitration. The mediation and arbitration will take place in the city where Chicken Guy's principal offices are located at the time the demand for mediation or arbitration is filed, which is currently Orlando, Florida.
Furthermore, any actions for injunctive relief must be filed in the jurisdiction where Chicken Guy's principal offices are located at the time suit is filed, which is currently Orlando, Florida, while simultaneously submitting the matter to mediation and then arbitration. Therefore, unless prohibited by state law, Chicken Guy franchisees may be required to participate in mediation, arbitration, or litigation outside of their home state, specifically in Orlando, Florida, where Chicken Guy's principal offices are located.