Does Chicken Guy have the right to transfer its option to purchase the franchisee's assets?

According to the 2025 Chicken Guy Franchise Disclosure Document, Chicken Guy has the right to transfer its option to purchase a franchisee's assets to a designee. The FDD specifies that when purchasing a franchisee's interest, "Chicken Guy or its designee shall be entitled to set off any monies owed to Chicken Guy or its affiliates by Franchisee and Chicken Guy or its designee shall be entitled to all customary representations and warranties that the assets are free and clear".

This means that Chicken Guy can assign its right to purchase the franchise's assets to another party, such as an affiliate or a third-party buyer. This designee would then have the same rights and obligations as Chicken Guy would have had, including the right to conduct due diligence, set off any debts the franchisee owes to Chicken Guy, and receive warranties that the assets are free and clear of any issues.

For a prospective franchisee, this clause indicates that if Chicken Guy decides to exercise its option to purchase the franchise, it doesn't necessarily mean Chicken Guy itself will be the buyer. It could be another entity designated by Chicken Guy. This could impact the negotiation process or the future relationship with the business, depending on who the designee is. Franchisees should be aware that they may be dealing with a different entity than Chicken Guy itself during the purchase process.

It is important for franchisees to understand the implications of dealing with a designee and to ensure that the designee is reputable and financially stable. Franchisees should also seek legal counsel to review the purchase agreement and ensure that their interests are protected.