How is the Initial Franchise Fee for a Chicken Guy franchise determined?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **A.
Initial Franchise Fee.** Simultaneously with the execution of this Agreement, Franchisee shall pay an initial franchise fee to Chicken Guy in the amount set forth on the attached Data Sheet ("Initial Franchise Fee").
Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Chicken Guy when paid and is not refundable.
Any Development Fees previously paid by Franchisee to Chicken Guy with respect to the Franchised Restaurant shall be credited against the Initial Franchise Fee.
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- Initial Franchise Fee Reduction. Notwithstanding the provisions of the Data Sheet and Section 7.A.(2) of the Franchise Agreement, Franchisee shall receive a $5,000 discount and pay a reduced Initial Franchise Fee to Chicken Guy in the amount of $45,000.
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- Repayment of Reduced Initial Franchise Fee on Transfer or Termination. If, prior to the first anniversary of the opening date of the Restaurant, (a) Franchisee transfers the Restaurant; or (b) Chicken Guy terminates the Franchise Agreement, then Franchisee must pay to Chicken Guy the portion of the Initial Franchise Fee that was waived by Chicken Guy in the amount of $5,000.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the initial franchise fee is determined at the time of signing the Franchise Agreement. The franchisee must pay the initial franchise fee to Chicken Guy, with the specific amount set forth on the attached Data Sheet. Once paid, this fee is considered fully earned by Chicken Guy and is non-refundable.
Notably, any Development Fees previously paid by the franchisee to Chicken Guy for the franchised restaurant will be credited against this initial franchise fee. This means that if a franchisee has already invested in development, that investment reduces the upfront franchise fee.
Furthermore, the FDD mentions a potential reduction in the initial franchise fee under certain conditions. Specifically, franchisees may receive a $5,000 discount, reducing the fee to $45,000. However, this discount is contingent. If the franchisee transfers the restaurant or Chicken Guy terminates the Franchise Agreement before the first anniversary of the restaurant's opening date, the franchisee must repay the waived $5,000 to Chicken Guy. This clause protects Chicken Guy's initial investment and ensures that franchisees are committed to the long-term success of the business.