What is the franchisee required to deliver to Chicken Guy for purchased assets?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
At the Closing, Franchisee shall deliver instruments transferring to Chicken Guy or its assignee: (1) good and merchantable title to the Assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to Chicken Guy or its assignee), with all sales and other transfer taxes paid by Franchisee; (2) all liquor licenses and licenses and permits for the Franchised Restaurant that may be assigned or transferred, with appropriate consents, if required; and (3) the lease or sublease for the Franchised Location, with appropriate consents, if required.
If Franchisee cannot deliver clear title to all of the purchased Assets as indicated in this Section, or if there are other unresolved issues, the Closing shall be accomplished through an escrow.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, when a franchisee sells assets back to Chicken Guy, the franchisee must deliver specific items at closing. These include providing good and clear title to the assets being purchased, ensuring they are free of liens or encumbrances, although Chicken Guy may find some acceptable. The franchisee is responsible for paying all sales and transfer taxes.
Additionally, the franchisee must transfer any assignable or transferable liquor licenses, permits, and licenses related to the franchised restaurant, securing the necessary consents if required. The franchisee must also provide the lease or sublease for the franchised location, again with appropriate consents if needed.
If the franchisee cannot provide clear title to all purchased assets or if there are unresolved issues, the closing will be managed through an escrow account. This ensures that all conditions are met before the sale is finalized, protecting both Chicken Guy and the franchisee. These stipulations ensure a smooth and legally sound transfer of assets back to Chicken Guy.