If the Developer fails to comply with the competitive restrictions, will that period of noncompliance be credited toward the 1-year obligation for Chicken Guy?

According to Chicken Guy's 2025 Franchise Disclosure Document, if a Developer fails to comply with the obligations under Section 12 of the agreement during the 1-year period following the expiration or earlier termination of the agreement, that period of noncompliance will not be credited towards the Developer's satisfaction of the 1-year obligation. This means the one-year clock on the non-compete restarts from the moment the developer ceases non-compliance.

This has significant implications for a prospective Chicken Guy franchisee. After the franchise agreement ends, the franchisee is still bound by certain restrictions, including non-compete clauses. If the franchisee violates these restrictions, the period of violation does not count towards fulfilling the 1-year obligation. In practical terms, this extends the period during which the franchisee is restricted from engaging in competitive activities.

For example, if a Chicken Guy franchisee's agreement terminates and they immediately open a competing chicken restaurant, that time spent operating the competing restaurant would not reduce their 1-year non-compete obligation. If they cease operating the competing restaurant after six months, they would still be subject to the non-compete for a full year from that point forward. This provision is designed to strongly discourage franchisees from violating the non-compete agreement, as any violation effectively prolongs the restriction period.