What rights does Chicken Guy have regarding inspections of a franchised restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) To determine whether Franchisee and the Franchised Restaurant are in compliance with this Agreement and with all specifications, quality standards and operating procedures prescribed by Chicken Guy for the operation of Chicken Guy! Restaurants, Chicken Guy or its designees shall have the right at any reasonable time and without prior notice to Franchisee to: (a) inspect the Franchised Location; (b) observe, photograph and videotape the operations of the Franchised Restaurant for such consecutive or intermittent periods as Chicken Guy deems necessary; (c) remove samples of any food and beverage product, material or other products for testing and analysis (without paying for the samples); (d) interview personnel of the Franchised Restaurant; (e) interview customers of the Franchised Restaurant; and (f) inspect and copy any books, records and documents relating to the operation of the Franchised Restaurant or, upon the request of Chicken Guy or its designee, require Franchisee to send copies thereof to Chicken Guy or its designee. Franchisee shall present to its customers those evaluation forms as are periodically prescribed by Chicken Guy and shall participate and/or request its customers to participate in any surveys performed by or on behalf of Chicken Guy as Chicken Guy may direct.
- (2) Franchisee agrees to cooperate fully with Chicken Guy or its designee in connection with any such inspections, observations, videotaping, product removal and interviews. Following each inspection, Chicken Guy will provide Franchisee an inspection report listing Franchisee's score on the inspection and those conditions at the Franchised Restaurant that must be rectified. Franchisee shall take all necessary steps to immediately correct any deficiencies detected during these inspections (regardless of Franchisee's inventory), including, without limitation, ceasing further sale of unauthorized menu items and ceasing further use of any equipment, advertising materials or supplies that do not conform with the standards and requirements promulgated by Chicken Guy from time to time.
- (3) If Franchisee fails to achieve a passing score on an inspection, Chicken Guy may, in its sole discretion, require that Franchisee's to Operating Principal and/or one or more managerial employees of the Franchised Restaurant attend and successfully complete an additional management
training program (the length of which will not exceed 10 consecutive days) to be held at a location designated by Chicken Guy. Franchisee shall pay a tuition charge as established by Chicken Guy from time to time for this training program and the travel, living, food and other incidental expenses incurred by Franchisee's employees while attending this training program.
(4) If Franchisee fails to achieve a passing score on an inspection, the inspection report shall constitute a notice of default. If Franchisee fails to achieve a passing score on the next inspection (which shall be conducted at least 30 days after Franchisee's receipt of the inspection report for the prior inspection), Chicken Guy may terminate this Agreement, without opportunity to cure, by providing Franchisee written notice of termination along with the inspection report.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy or its designees have the right to inspect a franchised restaurant at any reasonable time and without prior notice to the franchisee. These inspections are conducted to ensure that the franchisee and the restaurant are complying with the franchise agreement, as well as Chicken Guy's specifications, quality standards, and operating procedures.
During these inspections, Chicken Guy is permitted to inspect the location, observe, photograph, and videotape the restaurant's operations. They can also remove samples of food and beverage products for testing and analysis without paying for them. Additionally, Chicken Guy can interview restaurant personnel and customers, and inspect and copy any books, records, and documents related to the restaurant's operation. Franchisees are required to present customer evaluation forms and participate in surveys as directed by Chicken Guy.
Following an inspection, Chicken Guy will provide the franchisee with a report detailing their score and any deficiencies that need to be corrected. The franchisee must immediately take steps to rectify these deficiencies, which may include ceasing the sale of unauthorized menu items or discontinuing the use of non-conforming equipment or supplies. Failure to achieve a passing score on an inspection may result in Chicken Guy requiring the franchisee's Operating Principal or managerial employees to attend additional management training. If a franchisee fails to achieve a passing score on a subsequent inspection, Chicken Guy has the right to terminate the franchise agreement without an opportunity to cure the default.