If signing a Franchise Agreement without a Development Agreement, what must a Chicken Guy franchisee do regarding site selection?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sign a Franchise Agreement without a Development Agreement, you must select a site which we approve, based on the site selection criteria we establish from time to time. Under the Franchise Agreement, we grant you the right to operate the Franchised Restaurant continuously at the approved site (the "Franchised Location"). You may not relocate the Franchised Restaurant without our prior written consent, which may be withheld by us in our sole discretion after reviewing a variety of factors, including population density, the proximity of other Chicken Guy! Restaurants and other relevant demographic factors. If we approve a relocation of your Franchised Restaurant, we have the right to charge you for all reasonable expenses actually incurred in connection with consideration of the request, and we may condition our approval upon the payment of an agreed minimum royalty fee to Chicken Guy during the period in which the Franchised Restaurant is not in operation.
Source: Item 12 — TERRITORY (FDD pages 34–36)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee signs a Franchise Agreement without a Development Agreement, they must select a site that Chicken Guy approves. This approval is based on site selection criteria that Chicken Guy establishes and updates periodically. Once a site is approved, the franchisee has the right to operate their Chicken Guy restaurant at that specific location, which is referred to as the "Franchised Location."
Relocating the Franchised Restaurant is not permitted without prior written consent from Chicken Guy. The decision to approve a relocation is at Chicken Guy's sole discretion, and they will consider factors such as population density, the proximity of other Chicken Guy restaurants, and other relevant demographic factors. This ensures that any relocation makes business sense for both the franchisee and the brand.
If Chicken Guy approves a relocation, they have the right to charge the franchisee for all reasonable expenses incurred during the consideration of the relocation request. Additionally, Chicken Guy may require the franchisee to pay an agreed minimum royalty fee during the period when the restaurant is not operational due to the relocation. This protects Chicken Guy's financial interests during the transition period and ensures that the relocation process is carefully considered by the franchisee.