If the Chicken Guy franchisee is an individual or a partnership of individuals, are they jointly and severally liable for the franchise agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Franchisee is an individual, or a partnership comprised solely of individuals, Franchisee 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 19.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 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if the franchisee is an individual or a partnership of individuals, each individual is jointly and severally bound by, and personally liable for, the performance of the Franchise Agreement. This means that each individual signing the agreement assumes full responsibility for all obligations and potential breaches, regardless of their specific role or contribution. Chicken Guy can pursue any one or all of the individuals for the full amount of any debt or obligation.
This provision ensures that Chicken Guy has recourse to all individual franchisees or partners for any failures in fulfilling the franchise agreement. It also stipulates that even if ownership is transferred for convenience, the original individuals remain liable. This is a standard practice in franchising, as it protects the franchisor from potential losses due to franchisee non-compliance.
For a prospective Chicken Guy franchisee, this means understanding the full extent of personal liability before entering into the agreement. Individuals should carefully consider the financial and operational risks, as their personal assets could be at stake if the franchise fails to meet its obligations. It is advisable to seek legal counsel to fully understand the implications of joint and several liability.