What restrictions are members of the Continuity Group subject to regarding the Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a corporation, a limited liability company or a partnership, the attached Data Sheet lists those persons whom Chicken Guy and Franchisee have designated as Franchisee's "Continuity Group." In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Franchisee shall execute addenda to the attached Data Sheet to reflect the change.
If Franchisee is a corporation, the Continuity Group shall at all times own at least 51% of the voting securities of Franchisee; if Franchisee is a limited liability company, the Continuity Group shall at all times own at least 51% of the membership interests in Franchisee; and if Franchisee is a partnership, the Continuity Group shall at all times have at least a 51% interest in the operating profits and losses and at least a 51% ownership interest in Franchisee.
F. Guarantees.
(1) All members of the Continuity Group and each of their spouses, if applicable, shall jointly and severally guarantee Franchisee's payment and performance under this Agreement and shall bind themselves to the terms of this Agreement pursuant to the attached Guarantee and Assumption of Franchisee's Obligations ("Guarantee"). Unless Franchisee is a publicly-held entity, all of Franchisee's
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 39–40)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, members of the Continuity Group face specific restrictions related to ownership and transfer of interests in the franchise entity. If the franchisee is a corporation, limited liability company, or partnership, the Data Sheet attached to the Franchise Agreement lists the individuals designated as the "Continuity Group." Any changes to this group or their ownership interests require the franchisee to update the Data Sheet.
The Continuity Group must maintain a minimum ownership stake in the franchise. For a corporation or limited liability company, the Continuity Group must own at least 51% of the voting securities or membership interests, respectively. If the franchisee is a partnership, the Continuity Group needs to hold at least a 51% interest in both the operating profits/losses and the overall ownership of the franchise. These requirements ensure that the individuals initially approved by Chicken Guy retain control over the franchise.
Furthermore, all members of the Continuity Group (and their spouses, if applicable) must jointly and severally guarantee the franchisee's payment and performance under the Franchise Agreement. This guarantee binds them to the terms of the agreement. This requirement may be waived by Chicken Guy at its discretion. These measures collectively aim to ensure the stability and commitment of the franchise ownership and management, aligning with Chicken Guy's interests in maintaining consistent brand standards and operational practices.