Can obligations or duties that contradict the express terms of the Chicken Guy Franchise Agreement be implied into the agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
mless from any ongoing liability under the lease from the date Chicken Guy assumes possession of the Franchised Location, and Franchisee will indemnify and hold Chicken Guy harmless from any liability under the lease prior to and including that date.
- J. Franchised Location Owned by Franchisee. If Franchisee owns the Franchised Location, Chicken Guy, at its option, will either purchase the fee simple interest or, upon purchase of the other Assets, enter into a standard lease with Franchisee on terms comparable to those for which similar commercial properties in the area are then being leased. The initial term of this lease with Franchisee shall be at least 10 years with 2 options to renew of 5 years each, and the rent shall be the fair market rental value of the Franchised Location. If Franchisee and Chicken Guy cannot agree on the fair market rental value of the Franchised Location, then appraisers (selected in the manner described in Section 24.C.) shall determine the rental value.
- K. Franchisee's Obligations at Closing. At the Closing, Franchisee shall deliver instruments transferring to Chicken Guy or its assignee: (1) good and merchantable title to the Assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to Chicken Guy or its assignee), with all sales and other transfer taxes paid by Franchisee; (2) all liquor licenses and licenses and permits for the Franchised Restaurant that may be assigned or transferred, with appropriate consents, if required; and (3) the lease or sublease for the Franchised Location, with appropriate consents, if required. If Franchisee cannot deliver clear title to all of the purchased Assets as indicated in this Section, or if there are other unresolved issues, the Closing shall be accomplished through an escrow.
25. RELATIONSHIP OF THE PARTIES
- A. This Agreement does not create a fiduciary or other special relationship between the parties. No agency, employment, or partnership is created or implied by the terms of this Agreement, and each party is not and shall not hold itself out as an agent, legal representative, partner, subsidiary, joint venturer, joint employer, or employee of the other for any purpose whatsoever. Neither this Agreement nor Chicken Guy's course of conduct is intended, nor may anything in this Agreement (nor Chicken Guy's course of conduct) be construed to state or imply that Chicken Guy is the employer of Franchisee's employees and/or independent contractors, nor vice versa. Franchisee shall have no right or power to, and shall not, bind or obligate Chicken Guy or its affiliates in any way or manner, nor represent that Franchisee has any right to do so.
- B. Franchisee is an independent contractor and is solely responsible for all aspects of the development and operation of the Franchised Restaurant, subject only to the conditions and covenants established by this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the franchise agreement explicitly states that no obligations or duties contradicting its express terms can be implied. Specifically, the agreement clarifies that it does not establish a fiduciary or special relationship between Chicken Guy and the franchisee. It also states that no agency, employment, or partnership is created or implied by the agreement's terms.
This provision is intended to ensure that the relationship between Chicken Guy and its franchisees remains a commercial, arms-length business relationship. The franchisee operates as an independent contractor, responsible for all aspects of the restaurant's development and operation, subject only to the conditions and covenants outlined in the franchise agreement. Chicken Guy has no responsibility to ensure the restaurant complies with all applicable laws and regulations.
The franchisee must acknowledge their independent ownership of the franchised restaurant in all public records, interactions, and business materials. They must also post a sign indicating independent ownership and operation under a franchise agreement with Chicken Guy. This separation reinforces the explicit terms of the agreement, preventing any implied obligations that might arise from a perceived employer-employee or partnership relationship.
Chicken Guy also states that different franchisees may have agreements with varying provisions, conditions, and obligations. However, the existence of these different agreements does not affect the duties of the parties to comply with the specific terms of their individual franchise agreement. This clause further protects Chicken Guy from implied obligations based on arrangements with other franchisees.