What are the insolvency-related events that could lead to termination of the Chicken Guy Development Agreement?

According to Chicken Guy's 2025 Franchise Disclosure Document, the Development Agreement can be terminated if the developer experiences certain insolvency-related events. Specifically, Chicken Guy can terminate the agreement if the developer: is insolvent or unable to pay its creditors, including Chicken Guy; files a petition in bankruptcy, an arrangement for the benefit of creditors, or a petition for reorganization; has such a petition filed against them that is not dismissed within 60 days; makes an assignment for the benefit of creditors; or has a receiver or trustee appointed for them that is not dismissed within 60 days.

These conditions are fairly standard in franchise agreements, as the financial stability of the developer is critical to their ability to fulfill their obligations under the agreement, such as opening the required number of Chicken Guy restaurants according to the development schedule. Insolvency events suggest a high risk of the developer being unable to meet these obligations, which could harm the Chicken Guy brand and system.

The inclusion of specific timeframes (e.g., 60 days for dismissal of bankruptcy petitions or receiver appointments) provides some clarity and protection for the developer. It allows a window to resolve financial issues before Chicken Guy can terminate the agreement. However, any of these insolvency events could have significant repercussions for the developer's rights and investment under the Development Agreement.