For how long after the expiration or termination of the Development Term is the Developer restricted from diverting business from Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Divert or attempt to divert any business or customer, or potential business or customer, of any restaurant franchised or operated by Chicken Guy or its affiliates to any competitor, by direct or indirect inducement or otherwise.
- (b) Own, maintain, operate, engage in, advise, help, make loans to, or have any interest in, either directly or indirectly, any restaurant business: (i) that features chicken as a primary menu item (i.e., sales of chicken menu items comprise at least 20% of sales); or (ii) whose method of operation or trade dress is similar to that employed in the System.
During the Development Term, there is no geographical limitation on this restriction.
Following the expiration or earlier termination of the Development Term, this restriction shall apply within the Development Territory, within 2 miles of the border of the Development Territory and within 2 miles of any then-existing Chicken Guy!
Restaurant, except as otherwise approved in writing by Chicken Guy.
This restriction shall not apply to Developer's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor shall it apply to other restaurants operated by Developer that are franchised by Chicken Guy or its affiliates.
- (3) If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.
If, at any time during the 1-year period following expiration or earlier termination of this Agreement, Developer fails to comply with its obligations under this Section, that period of noncompliance will not be credited toward Developer's satisfaction of the 1-year obligation.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a developer is restricted from diverting business for a period of one year following the expiration or earlier termination of the Development Term. Specifically, the developer is prohibited from diverting business or customers of any restaurant franchised or operated by Chicken Guy or its affiliates to any competitor. They are also restricted from owning, operating, or having any interest in a restaurant business that features chicken as a primary menu item (at least 20% of sales) or whose method of operation or trade dress is similar to the Chicken Guy system.
During the Development Term, there are no geographical limitations on this restriction. However, after the Development Term expires or is terminated, the restriction applies within the Development Territory, within 2 miles of the border of the Development Territory, and within 2 miles of any then-existing Chicken Guy restaurant. This geographical restriction does not apply to the developer's existing restaurant or foodservice operations identified in the attached Data Sheet or to other restaurants operated by the developer that are franchised by Chicken Guy or its affiliates.
It's important to note that if the developer fails to comply with these obligations at any time during the one-year period following the expiration or termination of the agreement, that period of noncompliance will not be credited toward fulfilling the one-year obligation. This means the restriction effectively extends until the developer has been in full compliance for a continuous year. If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.