What happens to the monies in the advertising fund if Chicken Guy terminates the fund?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) Chicken Guy reserves the right, in its sole discretion, to: (a) suspend contributions to and operations of each fund for one or more periods that it determines to be appropriate; (b) terminate any fund upon 30 days' written notice to Franchisee and establish, if Chicken Guy so elects, one or more new advertising funds; and (c) defer or waive, in whole or in part, upon the written request of any franchised or company restaurants, any advertising fees required by this Section if, in Chicken Guy's sole judgment, there has been demonstrated unique, objective circumstances justifying any such waiver or deferral. On termination of a fund, all monies in the fund shall be spent for advertising and/or promotional purposes. Chicken Guy has the right to reinstate any fund upon the same terms and conditions set forth in this Agreement upon 30 days' prior written notice to Franchisee. Chicken Guy, in its sole discretion as it deems appropriate in order to maximize media effectiveness, may transfer monies from the Brand Fund to any Regional Advertising Fund or from all Regional Advertising Funds to the Brand Fund.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy FDD, if Chicken Guy terminates an advertising fund, all the monies in that fund must be spent for advertising and/or promotional purposes. Chicken Guy must provide franchisees with 30 days written notice before terminating a fund. Chicken Guy also has the right to reinstate any fund after termination, providing franchisees with 30 days written notice.
Chicken Guy has the discretion to suspend contributions to and operations of each fund for a period that it determines to be appropriate. Chicken Guy can also defer or waive advertising fees for franchised or company restaurants if there are unique circumstances that justify a waiver or deferral.
Chicken Guy may transfer monies from the Brand Fund to any Regional Advertising Fund or from all Regional Advertising Funds to the Brand Fund to maximize media effectiveness. This provides Chicken Guy with flexibility in allocating advertising resources to where they are most needed.