Who must be members of the Continuity Group for a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
a publicly-held entity after that date, it shall thereafter be required to execute addenda to the attached Data Sheet only with respect to changes in ownership interests of members of the Continuity Group.
- D. Restrictive Legend. If Franchisee is a corporation, Franchisee shall maintain stop-transfer instructions against the transfer on its records of any voting securities, and each stock certificate of the corporation shall have conspicuously endorsed upon its face the following statement: "Any assignment or transfer of this stock is subject to the restrictions imposed on assignment by the Chicken Guy! Restaurant Franchise Agreement(s) to which the corporation is a party." If Franchisee is a publicly-held corporation these requirements shall apply only to the stock owned by Franchisee's Continuity Group. If Franchisee is a limited liability company, each membership or management certificate or other evidence of interest in Franchisee shall have conspicuously endorsed upon its face the following statement: "Any assignment or transfer of an interest in this limited liability company is subject to the restrictions imposed on assignment by the Chicken Guy! Restaurant Franchise Agreement(s) to which the limited liability company is a party." If Franchisee is a partnership, its written partnership agreement shall provide that ownership of an interest in the partnership is held subject to, and that further assignment or transfer is subject to, all restrictions imposed on assignment by this Agreement.
- E. Continuity Group. If Franchisee is a corporation, a limited liability company or a partnership, the attached Data Sheet lists those persons whom Chicken Guy and Franchisee have designated as Franchisee's "Continuity Group." In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Franchisee shall execute addenda to the attached Data Sheet to reflect the change. If Franchisee is a corporation, the Continuity Group shall at all times own at least 51% of the voting securities of Franchisee; if Franchisee is a limited liability company, the Continuity Group shall at all times own at least 51% of the membership interests in Franchisee;
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 39–40)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the specific individuals who must be members of the Continuity Group are listed on the Data Sheet attached to the Franchise Agreement. The Data Sheet lists those persons whom Chicken Guy and the franchisee have designated as the franchisee's "Continuity Group." If there are any changes to the Continuity Group or their ownership interests, the franchisee must update the Data Sheet to reflect these changes.
The Continuity Group is important because they must collectively maintain significant ownership in the Chicken Guy franchise. Specifically, the Continuity Group must own at least 51% of the voting securities if the franchisee is a corporation, at least 51% of the membership interests if the franchisee is a limited liability company, or at least a 51% interest in the operating profits and losses and a 51% ownership interest if the franchisee is a partnership.
Furthermore, all members of the Continuity Group, along with their spouses (if applicable), must jointly and severally guarantee the franchisee's payment and performance under the Franchise Agreement. This means they are personally liable for the franchise's obligations. The Operating Principal must always be a member of the Continuity Group and have at least a 10% equity ownership interest in the franchisee, unless the franchisee was a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity when the initial franchise agreement was signed with Chicken Guy.