Is Chicken Guy permitted to terminate the franchise agreement without cause?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning transfer, termination or non-renewal of the franchise and development agreements. If the agreements contain a provision that is inconsistent with the law, the law will control.
With respect to franchises governed by Minnesota law, Chicken Guy will comply with Minnesota Statute § 80C.14, Subdivision 3, 4, and 5 which requires, except in certain cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of franchise agreements.
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- In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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- Any provision in the Franchise Agreement that is inconsistent with the New York General Business Law, Article 33, Sections 680 – 695, may not be enforceable.
As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
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- Questionnaires and Acknowledgments. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, whether Chicken Guy can terminate the franchise agreement without cause depends on the specific laws governing the franchise agreement, particularly in states like California, Minnesota, Illinois, New York, and Washington. These states have franchise laws that may restrict Chicken Guy's ability to enforce certain termination provisions. For example, California law states that if the franchise agreement contains a provision inconsistent with the law, the law will control. Similarly, Illinois, New York, and Washington have specific regulations that can void certain provisions in the franchise agreement that waive franchisee rights or disclaim reliance on franchisor statements.
Specifically, Minnesota law requires Chicken Guy to provide a 90-day notice of termination (with 60 days to cure) except in certain cases, and 180 days' notice for non-renewal. This suggests that termination without cause may not be permissible in Minnesota without adhering to these notice requirements. In Washington, any provisions that waive claims under state franchise law or disclaim reliance on franchisor statements are void.
Therefore, a Chicken Guy franchisee needs to be aware of the specific state laws that govern their franchise agreement, as these laws can significantly impact the enforceability of termination provisions. It is advisable for prospective franchisees to consult with a legal professional to understand their rights and obligations under the franchise agreement and applicable state laws, especially concerning termination and non-renewal.