What right does Chicken Guy reserve after receiving the franchisee's notice of completion?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall notify Chicken Guy in writing at least 30 days prior to the date Franchisee expects construction and/or renovation to be completed and a certificate of occupancy to be issued.
If requested by Chicken Guy, Franchisee shall submit a copy of the certificate of occupancy to Chicken Guy.
Chicken Guy reserves the right, after receiving Franchisee's notice, to conduct a final inspection of the Franchised Restaurant and its premises to determine if Franchisee has complied with this Agreement.
Chicken Guy shall not be liable for delays or loss occasioned by its inability to complete its investigation and to make a determination within this period.
Franchisee shall not open the Franchised Restaurant for business without Chicken Guy's express written authorization, which will not be granted unless Franchisee has satisfied the conditions contained in Section 6.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, after a franchisee provides written notice at least 30 days before the anticipated completion of construction or renovation and the issuance of a certificate of occupancy, Chicken Guy reserves the right to conduct a final inspection of the franchised restaurant and its premises. This inspection is to determine if the franchisee has complied with the franchise agreement. Chicken Guy also states that they will not be held responsible for any delays or losses that may occur if they are unable to complete their investigation and make a determination within the specified time frame.
This provision allows Chicken Guy to ensure that the restaurant meets their standards and complies with the franchise agreement before opening. The franchisee must also submit a copy of the certificate of occupancy if requested by Chicken Guy. The franchisee cannot open the restaurant for business without Chicken Guy's express written authorization, which is only granted if the franchisee has met all the conditions outlined in Section 6 of the agreement.
Section 6 lists conditions that must be met before Chicken Guy will authorize the opening of the franchised restaurant. These conditions include ensuring the franchisee is not in material default under any agreements with Chicken Guy, is current on all obligations, and has constructed or renovated the restaurant substantially in accordance with the approved plans and local codes. If the location is leased, Chicken Guy must also receive a copy of the fully-executed lease. This process protects Chicken Guy's brand standards and ensures consistency across all franchise locations.
For a prospective franchisee, this means they must be prepared for a final inspection by Chicken Guy before opening their restaurant. They should ensure that all construction and renovations are completed according to the approved plans and that all necessary documentation, such as the certificate of occupancy and lease agreement, is readily available. Failure to meet these requirements could delay the opening of the restaurant and potentially lead to financial losses.