What is Chicken Guy's liability if it approves a transfer and the transferee experiences financial difficulties?

According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy's decision to approve a transfer does not create any liability on its part to the transferee if the transferee subsequently experiences financial difficulties. This means that if Chicken Guy approves a transfer of the franchise to a new owner, and that new owner struggles financially, Chicken Guy is not liable for those financial difficulties.

This provision protects Chicken Guy from potential lawsuits or claims by the transferee related to financial losses. However, Chicken Guy does consider the financial stability of potential transferees during the approval process. The FDD states that the proposed transferee must demonstrate adequate financial resources and working capital to meet the obligations under the Development Agreement. Chicken Guy also assesses whether the sales price would jeopardize the transferee's ability to operate the franchised restaurants and meet financial obligations.

Despite these considerations, the clause explicitly absolves Chicken Guy of liability, highlighting the importance for potential transferees to conduct their own thorough due diligence and financial assessment before acquiring a Chicken Guy franchise. This includes carefully evaluating the market, understanding the costs of operating the franchise, and ensuring they have sufficient capital to sustain the business, regardless of Chicken Guy's initial approval of the transfer.