Can a Chicken Guy franchisee withhold royalty fees due to alleged non-performance by Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not be entitled to set off, deduct or otherwise withhold any royalty fees, advertising contributions, interest charges or any other monies payable by Franchisee under this Agreement on grounds of any alleged non-performance by Chicken Guy of any of its obligations or for any other reason.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a franchisee is not entitled to withhold royalty fees or any other payments due to Chicken Guy, regardless of any alleged non-performance by Chicken Guy or any other reason.
This means that franchisees must continue to pay all required fees, including royalty fees, advertising contributions, and interest charges, even if they believe Chicken Guy is not fulfilling its obligations under the franchise agreement. Failure to have sufficient funds in the designated account for electronic funds transfer constitutes a default of the agreement.
If a franchisee overpays, the excess amount will be credited to their account on the first reporting date after Chicken Guy and the franchisee agree that a credit is due. This policy ensures that Chicken Guy receives consistent payments and avoids potential disruptions to its revenue stream, while the franchisee must pursue other avenues for resolving disputes or seeking compensation for any perceived non-performance by Chicken Guy.