How is the Protected Area determined for Chicken Guy Franchised Restaurants developed under a Development Agreement?

According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee develops Franchised Restaurants under a Development Agreement, the Protected Area for each Franchised Restaurant will be determined according to the policies in place when each individual Franchise Agreement is signed. This means the specific terms regarding the Protected Area are not fixed at the time of the Development Agreement but are subject to change based on Chicken Guy's prevailing policies when each franchise location is established.

This approach differs from a standard Franchise Agreement where the Protected Area is typically defined at the outset. For franchisees pursuing a Development Agreement with Chicken Guy, it introduces an element of uncertainty, as the extent of territorial protection could vary for each location developed. The FDD also states that the franchisee will not receive any exclusive territory under the Development Agreement and may face competition from other franchisees, outlets that Chicken Guy owns, or other channels of distribution or competitive brands that Chicken Guy controls.

Prospective Chicken Guy franchisees should carefully consider this aspect, as the level of protection afforded to each restaurant could impact its potential profitability and competitive positioning. It would be prudent to discuss with Chicken Guy the factors that influence these policies and how they might evolve over the term of the Development Agreement. Understanding these factors can help a franchisee better assess the risks and opportunities associated with developing multiple Chicken Guy locations under a Development Agreement.