Does Chicken Guy need to approve the Operating Principal?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
all be a member of the Continuity Group and, at a minimum, have full control over the day-to-day activities, including operations, of the Franchised Restaurant and those other restaurants (that are franchised by Chicken Guy or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant, including control over the standards of operation and financial performance.
(c) The Operating Principal shall devote substantial time and adequate efforts to supervising the operation of the Franchised Restaurant and those other restaurants (that are franchised by Chicken Guy or its affiliates) operated by Franchisee in the same geographic area as the Franchised Restaurant and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility.
(d) The Operating Principal shall successfully complete the initial manager training program (either the full initial manager training program or a modified version of the initial manager training program to meet the specific needs of the candidate, as deemed appropriate by Chicken Guy in its sole discretion) and any additional training required by Chicken Guy.
(e) The Operating Principal shall have at least five years' of full profit and loss responsibility and accountability, with a history of operating at least as many restaurants as Franchisee has agreed to develop under a Chicken Guy! Restaurant Development Agreement, if applicable, or at least one restaurant if Franchisee is only entering into this Agreement.
(f) Chicken Guy shall have approved the Operating Principal, and not have later withdrawn that approval.
(2) If the Operating Principal no longer qualifies as such, Franchisee shall designate another qualified person to act as Operating Principal within 30 days after the date the prior Operating Principal ceases to be qualified. Franchisee's designee to become the Operating Principal must successfully complete the initial manager training program. Following Chicken Guy's approval of a new Operating Principal, that person shall execute the attached form of Guarantee unless waived by Chicken Guy in its sole discretion.
18. TRANSFERS BY CHICKEN GUY
Chicken Guy shall have the absolute, unrestricted right, exercisable at any time, to transfer and assign all or any part of its rights and obligations under this Agreement to any person or legal entity without the consent of Franchisee.
19. TRANSFERS BY FRANCHISEE
A. Chicken Guy's Prior Written Approval Required.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee is owned by more than one individual, they must designate an Operating Principal. Chicken Guy must approve this Operating Principal, and that approval cannot be withdrawn later.
The Operating Principal must meet specific qualifications, including having at least a 10% equity ownership in the franchisee, unless the franchisee was a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity when they first signed a franchise agreement with Chicken Guy. The Operating Principal must also be part of the Continuity Group and have full control over the day-to-day operations and financial performance of the franchised restaurant and other Chicken Guy restaurants operated by the franchisee in the same area.
The Operating Principal is expected to dedicate substantial time and effort to supervising the restaurant's operations and cannot be involved in other businesses that demand significant management responsibility. They must also complete Chicken Guy's initial manager training program. If the Operating Principal no longer qualifies for the role, the franchisee has 30 days to designate a replacement who also meets these requirements and completes the training. After Chicken Guy approves the new Operating Principal, that person must sign a guarantee, unless Chicken Guy waives this requirement.