If the Chicken Guy franchisee is an individual or partnership of individuals, does a transfer of ownership pursuant to Section 19.D affect their liability under the Chicken Guy franchise agreement?

According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee is an individual or a partnership comprised solely of individuals, a transfer for convenience of ownership under Section 19.D does not release them from their obligations under the franchise agreement. Each individual who originally signed the agreement remains jointly and severally bound by, and personally liable for, the timely and complete performance and any breach of every provision of the agreement, even after such a transfer. This means that even if the franchise is transferred to a corporation or limited liability company for ownership convenience, the original individual or partners retain personal liability.

This condition protects Chicken Guy by ensuring that the original franchisees remain accountable for the franchise's performance, even after the business structure changes. It is a stricter requirement than is typical in franchising, where liability may shift to the new business entity after a transfer.

For a prospective Chicken Guy franchisee, this means that they cannot escape liability by simply transferring ownership to a corporate entity. They should be aware that their personal assets could be at risk if the franchise does not perform well or if there is a breach of the franchise agreement, even after a transfer under Section 19.D. Franchisees should seek legal counsel to fully understand the implications of this clause before signing the franchise agreement.