What happens if a Chicken Guy franchisee is in default with a vendor or supplier before the renewal?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Franchisee and its affiliates shall not be in default under this Agreement or any other agreements between Franchisee and Chicken Guy or its affiliates; Franchisee shall not be in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; Franchisee shall not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant; and, for the 12 months before the date of Franchisee's notice and the 12 months before the expiration of the Initial Term, Franchisee and its affiliates shall not have been in default beyond the applicable cure period under this Agreement or any other agreements between Franchisee and Chicken Guy or its affiliates.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a franchisee's ability to renew their franchise agreement is contingent upon not being in default with any vendor or supplier. Specifically, to be eligible for renewal, the franchisee must not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant, both at the time of renewal and for the 12 months leading up to the renewal notice and the expiration of the initial term.
This condition means that if a Chicken Guy franchisee has unresolved payment issues or breaches of contract with a vendor or supplier, they risk losing their opportunity to renew their franchise. The franchisee must resolve any defaults within the cure period specified in their agreements to maintain eligibility for renewal. This requirement underscores the importance of maintaining positive relationships with all suppliers and adhering to the terms of all contracts.
Chicken Guy emphasizes consistent compliance by requiring franchisees to have a clean record with vendors and suppliers for a full year before the renewal process begins. This extended look-back period suggests that Chicken Guy places a high value on stable, reliable business operations and expects franchisees to manage their vendor relationships responsibly. Failing to meet these conditions gives Chicken Guy the right to deny the franchisee's renewal application, potentially leading to the termination of the franchise agreement at the end of its initial term.