In Michigan, under what circumstances can Chicken Guy refuse a transfer of ownership of a franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, in Michigan, Chicken Guy can refuse a transfer of ownership if the franchisee or the proposed transferee has not paid all sums owed to Chicken Guy or has failed to correct any existing default in the franchise agreement at the time of the proposed transfer.
This means that if a franchisee in Michigan wants to sell their Chicken Guy franchise, they must be current on all payments and in compliance with all terms of the franchise agreement. Any outstanding financial obligations or unresolved breaches of contract could prevent the transfer from being approved by Chicken Guy.
This provision protects Chicken Guy's interests by ensuring that franchisees meet their financial and contractual obligations before transferring ownership. It also ensures that any new franchisee coming into the system is not inheriting an already troubled business situation. Prospective franchisees should carefully review the franchise agreement to understand all the conditions that must be met for a transfer to be approved.