Does the restriction on Chicken Guy operating or licensing Chicken Guy restaurants in the Development Territory prohibit Chicken Guy from operating or licensing restaurants outside of the Development Territory?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Section 2 does not prohibit Chicken Guy or its affiliates from: (1) operating, and licensing others to operate, during the Development Term, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" at any location outside of the
Development Territory; (2) operating, and licensing others to operate, after this Agreement terminates or expires, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" at any location; and (3) operating, and licensing others to operate, at any location, during or after the Development Term, any type of restaurant other than a restaurant identified in whole or in part by the name and mark "CHICKEN GUY!"
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the development agreement does not prevent Chicken Guy from operating or licensing restaurants outside of the Development Territory. Chicken Guy retains the right to operate and license others to operate Chicken Guy restaurants at any location outside of the Development Territory during the Development Term.
This means that while a developer is granted rights to develop Chicken Guy restaurants within a specific geographic area, Chicken Guy is not restricted from expanding its brand outside of that territory. This allows Chicken Guy to pursue growth opportunities in other markets simultaneously.
This clause protects Chicken Guy's ability to grow and manage its brand on a larger scale, independent of individual development agreements. For a prospective developer, this highlights the importance of focusing on their designated territory and fulfilling their development schedule, as Chicken Guy can continue to expand elsewhere.