Does Chicken Guy have the right to charge expenses for considering a relocation request?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sign a Franchise Agreement without a Development Agreement, you must select a site which we approve, based on the site selection criteria we establish from time to time. Under the Franchise Agreement, we grant you the right to operate the Franchised Restaurant continuously at the approved site (the "Franchised Location"). You may not relocate the Franchised Restaurant without our prior written consent, which may be withheld by us in our sole discretion after reviewing a variety of factors, including population density, the proximity of other Chicken Guy! Restaurants and other relevant demographic factors. If we approve a relocation of your Franchised Restaurant, we have the right to charge you for all reasonable expenses actually incurred in connection with consideration of the request, and we may condition our approval upon the payment of an agreed minimum royalty fee to Chicken Guy during the period in which the Franchised Restaurant is not in operation.
Source: Item 12 — TERRITORY (FDD pages 34–36)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if a franchisee requests to relocate their restaurant, Chicken Guy has the right to charge them for reasonable expenses incurred while considering the relocation request. This is contingent on the franchisee signing a Franchise Agreement without a Development Agreement.
Chicken Guy's approval for relocation is not guaranteed and can be withheld at their discretion. Factors influencing this decision include population density, the proximity of other Chicken Guy restaurants, and other demographic factors. If Chicken Guy approves the relocation, they may also require the franchisee to pay an agreed minimum royalty fee during the period the restaurant is not operating during the move.
This policy is fairly standard in the franchise industry, as franchisors often want to ensure that any relocation makes strategic sense for the brand and won't negatively impact other franchisees. The potential expenses and royalty fees associated with relocation should be carefully considered by prospective franchisees, as these costs can add up quickly and impact profitability. Franchisees should discuss potential relocation scenarios and costs with Chicken Guy prior to signing the agreement.