Does Chicken Guy require approval for a franchisee to transfer their franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
partment of Financial Protection and Innovation.
4. Item 17, Additional Disclosures. The following statements are added to Item 17:
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.
The franchise and development agreements provide for termination upon bankruptcy. These provisions may not be enforceable under federal bankruptcy law (11 U.S.C.A. § 101, et seq.).
The franchise and development agreements provide for application of the laws of Florida. This provision may not be enforceable under California law.
The franchise and development agreements contain a choice of forum provision. This provision may not be enforceable under California law.
The franchise and development agreements contain a covenant not to compete that extends beyond the termination of the franchise. These provisions may not be enforceable under California law.
The franchise and development agreements contain liquidated damages clauses. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
Based on the 2025 Chicken Guy Franchise Disclosure Document, Item 17 includes information regarding transfer of a franchise agreement. Specifically, the FDD states that California Business and Professions Code Sections 20000 through 20043 provide rights to franchisees concerning transfer. The FDD also states that if the agreements contain a provision that is inconsistent with the law, the law will control.
Additionally, the 2025 Chicken Guy FDD notes that franchisees must sign a general release upon execution of the franchise and development agreements, if they transfer the rights granted under those agreements and if they renew their franchise under the franchise agreement. However, the FDD also states that these provisions may not be enforceable under California law. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 21000 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
For Maryland franchisees, the 2025 Chicken Guy FDD states that any provisions requiring you to sign a general release of claims against Chicken Guy, including upon execution of the franchise agreements, renewal or transfer, does not release any claim you may have under the Maryland Franchise Registration and Disclosure Law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.