Is Chicken Guy prohibited from operating or licensing restaurants other than Chicken Guy restaurants within the Protected Area?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Provided Franchisee is in compliance with this Agreement and any other agreements with Chicken Guy or its affiliates and is current on all obligations due Chicken Guy and its affiliates, during the term of this Agreement, Chicken Guy and its affiliates will not operate, or license others to operate, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" within the geographic area described on the attached Data Sheet ("Protected Area"). Notwithstanding the foregoing, Chicken Guy reserves to itself the rights to: (a) operate, and license others to operate, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" and/or utilizing the System in the Protected Area that are located in airports, train stations, bus stations, service plazas, stadiums, arenas, gas stations, convention centers, military facilities, convenience stores, schools, colleges, universities, hospitals, theme parks, office buildings, food courts, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos or any similar captive market location not reasonably available to Franchisee; (b) award national or regional licenses to third
parties to sell products under the name and mark "CHICKEN GUY!" in foodservice facilities primarily identified by the third party's trademark; (c) develop and operate, and license others to develop and operate, restaurants other than restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" and/or utilizing the System in the Protected Area; (d) merchandise and distribute products identified by some or all of the Proprietary Marks in the Protected Area through any other method or channel of distribution; and (e) sell and distribute products identified by some or all of the Proprietary Marks in the Protected Area to restaurants other than restaurants identified in whole or in part by the name and mark "CHICKEN GUY!," provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy is not prohibited from operating or licensing restaurants other than Chicken Guy restaurants within a franchisee's protected area. Specifically, Chicken Guy retains the right to develop and operate, and license others to develop and operate, restaurants other than those identified by the Chicken Guy name and mark, even within a franchisee's protected area.
This means that while a franchisee may have a protected area where Chicken Guy will not open another Chicken Guy restaurant, Chicken Guy is not restricted from opening or licensing other types of restaurants within that same area. This could include different restaurant concepts or brands that Chicken Guy or its affiliates own or have an interest in.
This clause has significant implications for prospective franchisees. It means that even with a protected area for the Chicken Guy brand, franchisees may face competition from other restaurant concepts operated or licensed by Chicken Guy itself. Therefore, franchisees should carefully evaluate the potential impact of such competition when assessing the viability of a Chicken Guy franchise location.