What must a Chicken Guy franchisee comply with to be eligible for a Protected Area?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you comply with the Franchise Agreement and any other agreements with us or our affiliates and are current on all obligations due us and our affiliates, during the term of the Franchise Agreement, we and our affiliates will not operate, or license others to operate, Chicken Guy! Restaurants in a geographic area surrounding the Franchised Location ("Protected Area"). This restriction applies only to Chicken Guy and does not apply to restaurants identified in whole or in part by the name and mark "Chicken Guy!" under construction or in operation in the Protected Area as of the date of the Franchise Agreement. The size of the Protected Area will vary depending on, among other things, the location in which you wish to operate the Franchised Restaurant. Typically, the Protected Area will be set as a radius around the Franchised Location. The perimeters of the Protected Area may be described by specific street boundaries, county lines, state lines, municipal boundaries, railroad tracks, or other similar boundary descriptions. Factors that we will use in order to determine the Protected Area include demographics, population density and number of households in the area, the growth profile of the populations within the area, the competitive environment in that market, and other factors that we will take into account. If you develop Franchised Restaurants under a Development Agreement, we will determine the Protected Area for each Franchised Restaurant according to the policies that are then in place when you sign each Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 34–36)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a franchisee must comply with the Franchise Agreement and any other agreements with Chicken Guy or its affiliates to be eligible for a Protected Area. Additionally, the franchisee must be current on all obligations due to Chicken Guy and its affiliates. If these conditions are met, Chicken Guy and its affiliates will not operate, or license others to operate, Chicken Guy restaurants in the Protected Area surrounding the franchisee's location during the term of the Franchise Agreement.
The Protected Area provides a limited form of territorial protection, but it is not exclusive. Chicken Guy retains the right to operate or license others to operate restaurants under the Chicken Guy name at Nontraditional Locations within the Protected Area. They can also award national or regional licenses to third parties to sell Chicken Guy products in foodservice facilities identified by the third party's trademark. Furthermore, Chicken Guy can develop and operate other restaurant concepts (not branded as Chicken Guy) within the Protected Area, as well as merchandise and distribute Chicken Guy products through other channels of distribution.
It's important to note that the Protected Area only exists during the term of the Franchise Agreement. After the agreement terminates or expires, Chicken Guy can operate or license others to operate Chicken Guy restaurants at any location, including the former Protected Area. The size of the Protected Area is not fixed and will vary depending on factors such as demographics, population density, growth profile, and the competitive environment. Prospective franchisees should carefully consider these factors and negotiate the terms of the Protected Area to ensure it provides adequate protection for their investment.
Prospective franchisees should also be aware that even with a Protected Area, they may face competition from other franchisees, company-owned outlets, other distribution channels, and competitive brands controlled by Chicken Guy. The Franchise Agreement does not grant the right to develop or operate more than one franchised restaurant. Therefore, franchisees should thoroughly evaluate the potential for competition and the limitations on territorial rights before investing in a Chicken Guy franchise.