If the Developer for Chicken Guy is an individual or partnership of individuals, what is the extent of liability for each individual regarding the Franchise Agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Developer is an individual, or a partnership comprised solely of individuals, Developer makes the following additional representations and warranties: (a) each individual has executed this Agreement; (b) each individual shall be jointly and severally bound by, and personally liable for the timely and complete performance and a breach of, each and every provision of this Agreement; and (c) notwithstanding any transfer for convenience of ownership pursuant to Section 10.D., each individual shall continue to be jointly and severally bound by, and personally liable for the timely and complete performance and a breach of, each and every provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if the Developer is an individual or a partnership comprised solely of individuals, each individual who has executed the Development Agreement is jointly and severally bound by its provisions. This means that each individual is personally liable for the timely and complete performance of, and any breach of, each and every provision of the Development Agreement. This obligation continues even if ownership is transferred for convenience.
In practical terms, this signifies that each individual's personal assets are at risk should the Developer fail to meet its obligations under the Development Agreement. This includes financial obligations, development schedules, and adherence to Chicken Guy's operational standards. If one partner is unable to meet their obligations, the other partner(s) become fully responsible for the entirety of the debt or liability.
This arrangement is a significant consideration for prospective Chicken Guy developers who plan to operate as individuals or partnerships. It is crucial to understand the full scope of the obligations and potential liabilities before entering into the Development Agreement. Consulting with a legal and financial advisor is highly recommended to assess the risks and ensure that all parties are fully aware of their responsibilities and potential exposure.