For Chicken Guy franchisees in South Dakota, what section of the Franchise Agreement is modified by the addendum, and what is the modification?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
e:
ADDENDUM TO THE CHICKEN GUY! RESTAURANT FRANCHISE AGREEMENT REQUIRED FOR SOUTH DAKOTA FRANCHISEES
| This | Addendum | to | the | Chicken | Guy! | Restaurant | Franchise | Agreement | dated | |||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ("Franchise Agreement") between Chicken Guy (Franchisor), LLC ("Chicken Guy") and ("Franchisee") is entered | ||||||||||||
| into simultaneously with the execution of the Franchise Agreement. |
- 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Franchisee was made in the State of South Dakota; (B) Franchisee is a resident of the State of South Dakota; and/or (C) the Franchised Restaurant will be located and/or operated, and/or all or part of the Protected Area will be located, in the State of South Dakota.
- 2. The following language is added to the end of Section 7. A. of the Franchise Agreement:
Pursuant to an order by the South Dakota Securities Regulation Office, Chicken Guy has posted a surety bond in the amount of $50,000.
*
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 addendum for South Dakota franchisees modifies Section 7.A of the Franchise Agreement. Specifically, the addendum adds the following language to the end of that section: "Pursuant to an order by the South Dakota Securities Regulation Office, Chicken Guy has posted a surety bond in the amount of $50,000."
This modification indicates that Chicken Guy is required to maintain a surety bond of $50,000 in South Dakota due to an order from the state's Securities Regulation Office. This bond likely serves as a form of financial protection for franchisees in the event that Chicken Guy fails to meet its obligations under the Franchise Agreement.
For a prospective franchisee, this means that there is a degree of financial security in place, mandated by the state, should Chicken Guy encounter financial difficulties or fail to uphold its contractual duties. It is important for potential franchisees to understand the implications of this surety bond and how it might protect their investment. They should also inquire about the specific circumstances that led to the South Dakota Securities Regulation Office requiring the bond.