What is the nature of the $10,000 transfer fee for Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
ransferee, if Chicken Guy disapproves the Transfer pursuant to this Section 10 or for other legitimate business purposes. Chicken Guy, without any liability to Developer or the proposed transferee, has the right, in its reasonable business discretion, to communicate and counsel with
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a transfer fee of $10,000 is required when a franchisee seeks to transfer their franchise to a new owner. This fee is nonrefundable and is intended to cover Chicken Guy's costs associated with reviewing the transfer application. The fee is payable before the transfer can take effect, and is tied to Chicken Guy's review process.
Several conditions must be met before Chicken Guy approves a transfer. The transferor must not be in default of any agreements with Chicken Guy, including lease or financing arrangements. Additionally, the transferor, along with all relevant individuals and guarantors, must execute a general release and covenant not to sue Chicken Guy, protecting the company from potential claims. The transferee may also be required to complete Chicken Guy's development training programs.
Chicken Guy also retains a right of first refusal, meaning that if a franchisee receives an offer from a third party to buy the franchise, the franchisee must first offer Chicken Guy the opportunity to purchase the franchise on the same terms. This allows Chicken Guy to maintain control over who becomes a franchisee and ensures that any new franchisee meets their standards. If Chicken Guy declines to exercise its right of first refusal, the franchisee is then free to proceed with the transfer to the third party, subject to the other conditions outlined in the FDD.