conditional

Does Chicken Guy have the right to prescribe upgraded or additional equipment and software for the franchised restaurant, and how does this affect the franchise agreement?

Chicken_Guy Franchise · 2025 FDD

Answer from 2025 FDD Document

ngoing software licensing fees shall be at Franchisee's expense. Chicken Guy reserves the right to require Franchisee to engage Chicken Guy or a hardware maintenance and/or help desk support provider approved by Chicken Guy to maintain Franchisee's technology system.

  • (2) As part of its technology system, Franchisee must record all sales at the Franchised Restaurant on a point of sale system that is fully compatible with Chicken Guy's technology system and that includes an information interface capability to communicate electronically with Chicken Guy's technology system to provide Chicken Guy with continuous transaction level point of sale data. Franchisee agrees that Chicken Guy shall have the free and unfettered right to retrieve any data and information from Franchisee's point of sale system as Chicken Guy, in its sole discretion, deems appropriate, including electronically polling the daily sales, menu mix and other data of the Franchised Restaurant. All data pertaining to, derived from, or displayed at the Franchised Restaurant (including without limitation data pertaining to or otherwise about Franchised Restaurant customers) is and shall be Chicken Guy's exclusive property, and Chicken Guy hereby grants Franchisee a royalty-free non-exclusive license to use that data during the Initial Term of this Agreement.
  • (3) Franchisee shall: (a) use any proprietary software programs, system documentation manuals and other proprietary materials provided to Franchisee by Chicken Guy in connection with the operation of the Franchised Restaurant; (b) input and maintain in Franchisee's technology system such data and information as Chicken Guy prescribes in the Manual, software programs, documentation or otherwise; and (c) purchase new or upgraded software programs, system documentation manuals and other proprietary materials at then-current prices (including ongoing software licensing fees) within 90 days after receipt of notice from Chicken Guy that Chicken Guy has adopted such new or upgraded programs, manuals and materials system-wide.
  • (4) Franchisee shall participate in Chicken Guy's online ordering system, if established, on such terms and conditions that Chicken Guy may specify in the Manual, and to pay the fees for such online ordering system that Chicken Guy and/or its vendor reasonably specify.
  • (5) Franchisee acknowledges that technology systems are designed to accommodate a finite amount of data and terminals, and that, as these limits are reached, or as technology or software is developed in the future, Chicken Guy may, in its sole discretion, mandate that Franchisee: (a) add memory, ports and other accessories or peripheral equipment or additional, new or substitute software to the original technology system purchased by Franchisee; and (b) replace or upgrade the entire technology system with a larger system capable of assuming and discharging the technology-related tasks and functions specified by Chicken Guy. Franchisee acknowledges that technology system designs and functions change periodically and that Chicken Guy may desire to make substantial modifications to its technology systems specifications or to require installation of entirely different systems during the term of this Agreement or upon renewal of this Agreement.
  • (6) To ensure full operational efficiency and communication capability between Chicken Guy's computers and those of all Chicken Guy! Restaurants, Franchisee agrees, at its expense, to keep its technology system in good maintenance and repair and to make additions, changes, modifications, substitutions and replacements to its hardware, software, telephone and data lines and other technologyrelated facilities as directed by Chicken Guy, and on the dates and within the times specified by Chicken Guy in its sole discretion. Upon termination or expiration of this Agreement, all software, disks, tapes, data storage devices, and other magnetic storage media shall be returned to Chicken Guy in good operating condition, excepting normal wear and tear.

F. Non-Cash Payment Systems and PCI Compliance.

(1) Within a reasonable period of time following Chicken Guy's request, Franchisee shall accept debit cards, credit cards, stored value gift cards or other non-cash payment systems, including participation in loyalty programs, specified by Chicken Guy to enable customers to purchase authorized products and shall obtain all necessary hardware and/or software used in connection with these non-cash

systems. Franchisee shall comply with all policies and procedures set forth by Chicken Guy in the Manual with respect to these non-cash payment systems.

  • (2) Franchisee shall maintain, at all times, credit-card relationships with the creditand debit-card issuers or sponsors, check or credit verification services, financial-center services, merchant service providers, and electronic-fund-transfer systems (together, "Credit Card Vendors") that Chicken Guy may periodically designate as mandatory. Franchisee shall not to use any Credit Card Vendor for which Chicken Guy has not given its prior written approval or as to which Chicken Guy has revoked its earlier approval.

Source: Item 22 — CONTRACTS (FDD page 50)

What This Means (2025 FDD)

According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy has extensive rights to mandate technology upgrades and changes, impacting franchisees financially and operationally. Chicken Guy can require franchisees to purchase new or upgraded software programs, system documentation manuals, and other proprietary materials within 90 days of notification. Franchisees are also obligated to participate in Chicken Guy's online ordering system, if established, and pay the associated fees. These stipulations ensure uniformity and integration across all Chicken Guy locations.

Chicken Guy retains the discretion to mandate franchisees to add memory, ports, accessories, peripheral equipment, or new software to their original technology systems. They can also require a complete replacement or upgrade of the technology system. Franchisees are responsible for keeping their technology systems in good repair and for making any additions, changes, modifications, substitutions, and replacements to hardware, software, telephone and data lines, and other technology-related facilities as directed by Chicken Guy. These changes must be implemented on the dates and within the times specified by Chicken Guy.

Furthermore, Chicken Guy requires franchisees to procure and install a technology system, including data processing equipment, computer hardware, software, a point-of-sale system, dedicated data and telephone lines, and internet connections. This system must provide Chicken Guy with any information they specify. Franchisees must also record all sales on a point-of-sale system compatible with Chicken Guy's system, allowing Chicken Guy to retrieve data, including daily sales and menu mix. All data from the franchised restaurant, including customer data, is Chicken Guy's exclusive property, with franchisees receiving a royalty-free, non-exclusive license to use the data during the agreement's initial term. These technology mandates ensure Chicken Guy maintains control over data and operational standards across all franchised locations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.