What right does Chicken Guy grant to the franchisee regarding the operation of the franchised restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
by Chicken Guy.
Franchisee understands and acknowledges the importance of Chicken Guy's high and uniform standards of quality, operations and service and the necessity of developing and operating the Franchised Restaurant in strict conformity with this Agreement and the Chicken Guy! Operations Manual ("Manual").
Chicken Guy is willing to grant Franchisee a license to operate the Franchised Restaurant at the Franchised Location, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of Chicken Guy's grant to Franchisee of the right to operate a Franchised Restaurant at the Franchised Location during the term of this Agreement, as well as the mutual covenants, agreements and obligations set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. GRANT OF FRANCHISE
A. Grant.
- (1) Subject to the provisions of this Agreement, Chicken Guy hereby grants to Franchisee the right ("Franchise") to continuously operate the Franchised Restaurant at the Franchised Location and to use the Proprietary Marks in the operation of the Franchised Restaurant. If Chicken Guy has not approved the site for the Franchised Restaurant as of the date of this Agreement, the provisions of Section 3 will apply with regard to Franchisee's selection of a site for the Franchised Restaurant.
- (2) Franchisee may not operate the Franchised Restaurant at any site other than the Franchised Location and may not relocate the Franchised Restaurant without Chicken Guy's prior written consent, which may be withheld by Chicken Guy in its sole discretion. If Chicken Guy approves a relocation of the Franchised Restaurant, Franchisee shall pay a relocation fee to Chicken Guy in the amount of $10,000 and Chicken Guy may condition its approval upon the payment of an agreed minimum royalty to Chicken Guy during the period in which the Franchised Restaurant is not in operation.
- (3) Franchisee agrees that it will at all times faithfully, honestly and diligently perform its obligations under this Agreement, that it will continuously exert reasonable efforts to promote and enhance the business of the Franchised Restaurant and that it will n
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, Chicken Guy grants the franchisee the right to continuously operate a Chicken Guy restaurant at an approved location, using their proprietary marks. This right is subject to the terms and conditions outlined in the franchise agreement. The franchisee is obligated to operate the restaurant only at the approved location and cannot relocate without prior written consent from Chicken Guy, who may withhold such consent at their discretion. If relocation is approved, the franchisee must pay a relocation fee of $10,000.
The franchisee must diligently perform their obligations under the agreement and continuously promote the restaurant. They are restricted from engaging in any conflicting business activities, except for operating other Chicken Guy restaurants or restaurants franchised by Chicken Guy's affiliates. Chicken Guy retains the right to require franchisee participation in catering and/or delivery programs, mandating compliance with specific procedures, menu requirements, and approved suppliers as detailed in the operations manual.
Chicken Guy also reserves the right to make periodic inspections of the restaurant to ensure compliance with the system standards. The franchisee is expected to maintain honesty and diligence in their operations, working to enhance the business. This includes obtaining necessary licenses and permits for catering and delivery services if required by Chicken Guy. The grant of franchise and the rights of the franchisee are explicitly subject to all provisions and conditions detailed within the franchise agreement, emphasizing the importance of understanding and adhering to these terms.