Does the limited exclusivity granted to Chicken Guy franchisees apply to Chicken Guy restaurants under construction or in operation in the Protected Area as of the date of the Franchise Agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) The restrictions contained in this Section 1.B. apply only to Chicken Guy and do not apply to restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" under construction or in operation in the Protected Area as of the date of this Agreement. Chicken Guy reserves to itself and its affiliates all rights to use and license the System and the Proprietary Marks other than those expressly granted under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the limited exclusivity granted to franchisees does not apply to Chicken Guy restaurants that are either under construction or already in operation within the Protected Area at the time the Franchise Agreement is signed. This means that even if a franchisee is granted a Protected Area, Chicken Guy retains the right to operate or license existing and in-progress locations within that area.
This exception to the exclusivity agreement could impact a franchisee's potential market share and revenue, as they may face direct competition from existing or soon-to-open Chicken Guy restaurants within their Protected Area from day one. The franchisee should carefully assess the competitive landscape, including any existing Chicken Guy locations, before signing the agreement.
It is important for prospective franchisees to understand the extent of any existing Chicken Guy restaurants within their potential Protected Area. This information should be discussed with the franchisor to fully understand the potential impact on the new franchise location. Franchisees should also consider how this exception might affect their long-term business strategy and financial projections.