Does Chicken Guy have any liability to the franchisee or proposed transferee when communicating about a proposed Chicken Guy franchise transfer?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Chicken Guy, without any liability to Franchisee or the proposed transferee, has the right, in its reasonable business discretion, to communicate and counsel with Franchisee and the proposed transferee regarding any aspect of the proposed Transfer.
Chicken Guy's decision with respect to a proposed Transfer shall not create any liability on the part of Chicken Guy: (a) to the transferee, if Chicken Guy approves the Transfer and the transferee experiences financial difficulties; or (b) to Franchisee or the proposed transferee, if Chicken Guy disapproves the Transfer pursuant to this Section 19 or for other legitimate business purposes.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, Chicken Guy faces no liability to the franchisee or the proposed transferee when communicating about a potential franchise transfer. Chicken Guy has the right to communicate and counsel with both parties regarding any aspect of the proposed transfer without incurring liability.
This means that Chicken Guy can freely discuss the transfer with both the franchisee and the potential buyer, offering advice or expressing concerns, without fear of being sued if the transfer ultimately fails or if the transferee experiences difficulties. This protects Chicken Guy's ability to manage its franchise system and ensure that transfers are conducted in a way that aligns with its business interests.
However, Chicken Guy's decision regarding a proposed transfer does not create liability. This protects Chicken Guy from potential lawsuits if they approve a transfer and the new franchisee struggles financially, or if they disapprove a transfer for legitimate business reasons. This clause ensures Chicken Guy can make transfer decisions based on their assessment of the situation without undue risk of legal action.