What investigations can Chicken Guy conduct during the Due Diligence Period?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of 30 days after the date of Chicken Guy's Purchase Notice ("Due Diligence Period"), Chicken Guy shall have the right to conduct such investigations as it deems necessary and appropriate to determine: (1) the ownership, condition and title of the Assets; (2) liens and encumbrances on the Assets; (3) environmental and hazardous substances at or upon the Franchised Location; and (4) the validity of contracts and liabilities inuring to Chicken Guy or affecting the Assets, whether contingent or otherwise.
Franchisee will afford Chicken Guy and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operations of the Franchised Restaurant.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy has specific rights to conduct investigations during the Due Diligence Period, which lasts for 30 days after Chicken Guy issues a Purchase Notice to the franchisee. These investigations are aimed at assessing various aspects of the assets and the franchised location to ensure they meet Chicken Guy's standards and expectations.
Chicken Guy can investigate the ownership, condition, and title of the assets, as well as any liens and encumbrances on those assets. This includes examining real estate interests through a nationally recognized title company and conducting lien searches. Chicken Guy can also assess environmental and hazardous substances present at the franchised location by procuring environmental assessments and testing. Furthermore, Chicken Guy can evaluate the validity of contracts and liabilities that could affect the assets or Chicken Guy itself.
Chicken Guy is also allowed to inspect the leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, and inventory to determine if they are in satisfactory working condition. To facilitate these investigations, the franchisee must provide Chicken Guy and its representatives access to the franchised restaurant and location at all reasonable times, ensuring that these inspections do not unreasonably interfere with the restaurant's operations. This comprehensive due diligence process allows Chicken Guy to make informed decisions about purchasing the assets and continuing the franchise operation.