Does the Chicken Guy franchise agreement require a franchisee to assent to a release that deprives them of rights and protections?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
s contain liquidated damages clauses. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
You must sign a general release upon execution of the franchise and development agreements, if you transfer the rights granted under those agreements and if you renew your franchise under the franchise agreement. These provisions may not be enforceable under California law. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 21000 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
To obtain a liquor license in California, you must apply in-person with the State of California Department of Alcoholic Beverage Control, at your district office ("Department"). The Department will conduct an investigation, and you are responsible for posting a public notice and furnishing any additional notices or information requested by the Department. An application for a liquor license in California can take from 55 to 175 days or more to be approved, depending on the circumstances. For more information, please visit https://www.abc.ca.gov/ or call the Department at 916.419.2500.
5. Item 22, Additional Disclosure. The following statements are added to Item 22:
No statement, questionnaire, or acknowledgement signed or agreed to by you in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by us, any franchise seller, or any other person acting on our behalf. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to the 2025 Chicken Guy FDD, the franchise agreement's requirements regarding releases, waivers, and protections vary by state. For California franchisees, the FDD states that you must sign a general release upon execution of the franchise and development agreements, if you transfer the rights granted under those agreements, and if you renew your franchise under the franchise agreement. However, these provisions may not be enforceable under California law. The California Corporations Code and Business and Professions Code void waivers of rights under the Franchise Investment Law and the Franchise Relations Act, respectively.
For franchisees in Minnesota, the Chicken Guy FDD includes addenda stating that franchisees and developers will not be required to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Minnesota Statute §§ 80C.01 - 80C.22. This suggests that Chicken Guy's standard agreements might contain such clauses, but they are explicitly overridden for Minnesota franchisees to comply with state law.
For franchisees in Maryland, Section 14-226 of the Maryland Franchise Registration and Disclosure Law prohibits Chicken Guy from requiring a prospective franchisee to assent to any release, estoppel, or waiver of liability as a condition of purchasing a franchise. The FDD also states that representations in the agreement are not intended to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. Similarly, for franchisees in Washington, any provisions contained in the Development Agreement or elsewhere that waive claims under any applicable state franchise law are void and unenforceable.
For franchisees in New York, any provision in the Franchise Agreement requiring Franchisee to sign a general release of claims against Chicken Guy does not release any claim Franchisee may have under New York General Business Law, Article 33, Sections 680-695. Prospective franchisees should consult with a legal professional to understand the specific implications of these clauses in their state and how they affect their rights and obligations under the franchise agreement.