Is the initial franchise fee for a Chicken Guy franchise refundable, and when is it considered fully earned?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement.
Franchise Agreement
When you sign the Franchise Agreement, you shall pay an Initial Franchise Fee in the amount of $50,000. The Initial Franchise Fee is fully earned by us when paid and is not refundable.
If you sign a Franchise Agreement pursuant to a Development Agreement, where you agreed to develop three or more Chicken Guy! Restaurants, we will reduce the Initial Franchise Fee to $40,000. The specific amount of the Initial Franchise Fee that you will owe under each Franchise Agreement will be specified in the Development Agreement.
If you open a Chicken Guy! Restaurant within a Walmart store, you will sign the Nontraditional Location Addendum to the Franchise Agreement and you will pay a reduced Initial Franchise Fee of $40,000.
Deposit Fee
When we approve your application to become a Chicken Guy! Restaurant franchisee, and prior to our preparation of your Franchise Agreement or Development Agreement, you will sign the Agreement Request Form attached as Exhibit C and pay a Deposit Fee in the amount of $5,000. The Deposit Fee is not refundable, but if you sign a Franchise Agreement or Development Agreement within 10 business days of receiving the agreement for signature, Chicken Guy shall apply the Deposit Fee toward payment of the Development Fee required under the Development Agreement or the Initial Franchise Fee required under the Franchise Agreement, as applicable.
Veterans Discount
Under our veterans program, if you (or a holder of at least a 51% ownership interest in your franchisee entity) provide us with a DD Form 214 or other adequate documentation, as determined by us, demonstrating honorable discharge from the United States military and you sign a Franchise Agreement to develop and operate a new Franchised Restaurant, then we will reduce your Initial Franchise Fee due under the Franchise Agreement by $5,000. You will sign a Veterans Addendum to the Franchise Agreement, a copy of which is attached as Exhibit I. If, prior to the first anniversary of the opening date of the Franchised Restaurant, (1) you transfer the Franchised Restaurant, or (2) we terminate the Franchise Agreement, you must pay us the $5,000 that we waived under the veterans program.
Team Member Training
If you postpone or delay team member training based on your failure to obtain a certificate of occupancy or for any other reason, you must reimburse us for any additional costs and expenses, including the salaries and wages for our trainers during the period of such delay. If the Franchised Restaurant is not your first Chicken Guy!
Source: Item 5 — INITIAL FEES (FDD pages 10–11)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the initial franchise fee is generally not refundable and is considered fully earned upon payment. Specifically, when signing the Franchise Agreement, the standard initial franchise fee is $50,000. However, this fee can be reduced to $40,000 if the franchisee signs a Franchise Agreement pursuant to a Development Agreement to develop three or more Chicken Guy restaurants, or if the restaurant is opened within a Walmart store using the Nontraditional Location Addendum.
There are a couple of instances where the initial franchise fee may be impacted. If a prospective franchisee pays a $5,000 Deposit Fee and signs a Franchise Agreement or Development Agreement within 10 business days of receiving the agreement, Chicken Guy will apply the Deposit Fee toward the initial franchise fee. Additionally, veterans who provide documentation of honorable discharge from the United States military may receive a $5,000 reduction in the initial franchise fee. However, if the franchise is transferred or terminated within the first year, the $5,000 discount must be repaid to Chicken Guy.
It is important to note that while the initial franchise fee is typically uniform, Chicken Guy did reduce the fee to $25,000 for one franchisee and waived it entirely for another in the last fiscal year. This indicates that there may be some room for negotiation or special circumstances that could affect the fee. Prospective franchisees should inquire about the possibility of any discounts or waivers based on their individual situation.
In summary, the initial franchise fee for a Chicken Guy franchise is generally $50,000, considered fully earned upon payment, and is non-refundable. However, potential franchisees should be aware of the conditions under which this fee may be reduced or impacted, such as through development agreements, veteran status, or potential negotiations with the franchisor.