What rights does Chicken Guy grant to the Developer regarding the development of Franchised Restaurants?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Grant; Territory. Chicken Guy hereby grants to Developer, subject to the terms, conditions, provisions and limitations of this Agreement, the right to develop Franchised Restaurants within the geographic area described in the attached Data Sheet ("Development Territory") during the Development Term. The Development Term begins on the date this Agreement is signed by Chicken Guy and terminates on the date that the Developer signs the lease or purchases the site for the last Franchised Restaurant that Developer is required to develop pursuant to the Development Schedule in the attached Data Sheet. There is no renewal term for this Agreement. Each Franchised Restaurant shall be located in the Development Territory at a specific location approved by Chicken Guy.
- B. Development Rights Only. This Agreement is not a license or a franchise agreement. It does not give Developer the right to operate Chicken Guy! Restaurants or use the System. In addition, this Agreement does not give Developer any right to license others to operate Chicken Guy! Restaurants or use the System. This Agreement only gives Developer the opportunity to enter into Franchise Agreements for the operation of Franchised Restaurants at locations in the Development Territory approved by Chicken Guy. Each Franchised Restaurant developed pursuant to this Agreement shall be established and operated only in strict accordance with a separate Franchise Agreement.
- C. Forms of Agreement. Developer acknowledges that Chicken Guy intends to enter into agreements with other developers and franchisees that may contain provisions, conditions and obligations that differ from those contained in this Agreement. The existence of different forms of agreement and the fact that Chicken Guy and other developers and franchisees may have different rights and obligations do not affect the duties of the parties to this Agreement to comply with the terms of this Agreement.
5. DEVELOPMENT PROCEDURES
- **A.
Developer's Responsibility.** Developer assumes all cost, liability and expense for locating, obtaining and developing sites for Franchised Restaurants and constructing and equipping Franchised Restaurants in accordance with Chicken Guy's standards at approved sites.
Developer shall not make any binding commitments to purchase or lease a site until Chicken Guy has approved the site in writing.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, Chicken Guy grants the Developer the right to develop franchised restaurants within a specific geographic area, known as the Development Territory, during the Development Term. The Development Term starts when the agreement is signed by Chicken Guy and ends when the Developer signs the lease or purchases the site for the last restaurant they are required to develop, as per the Development Schedule. It is important to note that this agreement does not include a renewal term. Each restaurant must be located within the Development Territory at a site approved by Chicken Guy.
This agreement solely provides development rights and is not a license or franchise agreement. It does not authorize the Developer to operate Chicken Guy restaurants or use the Chicken Guy system directly. Furthermore, the Developer cannot license others to operate Chicken Guy restaurants. The agreement only allows the Developer to enter into separate Franchise Agreements for operating restaurants at approved locations. Each restaurant must be established and operated strictly according to an individual Franchise Agreement.
The FDD also states that Chicken Guy may have different agreements with other developers and franchisees, which may include different provisions, conditions, and obligations. The existence of these different agreements does not affect the Developer's duty to comply with the terms of their specific Development Agreement. The Developer is responsible for all costs associated with finding, securing, and developing sites, as well as constructing and equipping the restaurants to Chicken Guy's standards. Chicken Guy must provide written approval before the Developer makes any binding commitments to purchase or lease a site.