Are performance and completion bonds required for new construction of a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee assumes all cost, liability and expense for developing, constructing and equipping the Franchised Restaurant.
Chicken Guy will furnish to Franchisee prototypical plans and specifications for a Chicken Guy!
Restaurant, including requirements for dimensions, design, image, interior layout, décor, fixtures, equipment, signs, furnishings, storefront and color scheme.
Chicken Guy reserves the right to require Franchisee to engage the services of an architect that has been approved by Chicken Guy.
It shall be Franchisee's responsibility to have the approved architect prepare all required construction plans and specifications to suit the shape and dimensions of the Franchised Location, and Franchisee must ensure that these plans and specifications comply with applicable ordinances, building codes and permit requirements and with lease requirements and restrictions.
Franchisee shall use only registered architects, registered engineers, and professional and licensed contractors.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the FDD does not explicitly state that Chicken Guy requires franchisees to obtain performance or completion bonds for new restaurant construction. However, Chicken Guy maintains significant control over the construction process. The franchisee is responsible for all costs associated with developing, constructing, and equipping the restaurant. Chicken Guy provides prototypical plans and specifications, and the franchisee must use approved architects, engineers, and contractors.
The franchisee is required to have an architect prepare construction plans that comply with all applicable ordinances, building codes, permit requirements, and lease restrictions. These plans must be submitted to Chicken Guy for approval, and no site preparation or construction can begin until written approval is received. Chicken Guy has the right to inspect the construction site to ensure compliance with the approved plans.
While the FDD does not mention performance or completion bonds, it emphasizes the franchisee's responsibility to complete construction by the specified deadline, subject to potential extensions only for events of Force Majeure. Given the franchisor's oversight and the franchisee's financial obligations, it would be prudent for a prospective franchisee to clarify with Chicken Guy whether performance or completion bonds are required in practice, despite not being explicitly mentioned in the FDD. This inquiry can help the franchisee fully understand the financial commitments and risk mitigation measures associated with constructing a Chicken Guy franchise.