How is the royalty fee calculated for a Chicken Guy franchise?

According to the 2025 Chicken Guy Franchise Disclosure Document, franchisees must pay a continuing royalty fee. The royalty fee is a percentage of the restaurant's Gross Sales, as specified in the Data Sheet attached to the Franchise Agreement. This fee grants the franchisee the right to use the Chicken Guy system and proprietary marks at the franchised location. Gross Sales include all revenue from food, beverages, and other income related to the restaurant, including cash, credit, and redemption of gift cards or certificates. However, Gross Sales do not include sales taxes, promotional discounts, employee discounts, proceeds from the sale of gift certificates, customer refunds, or the sale of equipment. If Chicken Guy is restricted from receiving a percentage royalty based on alcoholic beverage revenues due to laws, the franchisee will pay a royalty fee on all Gross Sales except alcoholic beverage revenues, equivalent to what would have been paid if the specified royalty fee percentage was applied to all Gross Sales.

Chicken Guy requires franchisees to participate in an electronic funds transfer program for royalty fee payments. These fees, along with advertising fees and interest charges, must be received by Chicken Guy by pre-authorized bank debit before 5:00 p.m. on the 5th day after the end of each fiscal week, or another specified date. Franchisees must report Gross Sales to Chicken Guy weekly. If a franchisee fails to report Gross Sales, Chicken Guy will estimate the Gross Sales and transfer the corresponding amount from the franchisee's account. Chicken Guy can also initiate an immediate transfer from the franchisee's account if it determines that the franchisee has underreported Gross Sales or underpaid royalty fees.

Franchisees are not entitled to offset, deduct, or withhold any royalty fees due to alleged non-performance by Chicken Guy or for any other reason. Late payments are subject to interest at the maximum rate permitted for this type of debt in the state where the restaurant is located, not exceeding 1.5% per month. This interest is in addition to any other remedies available to Chicken Guy. Chicken Guy has the discretion to apply any payments to past due indebtedness, including royalty fees, advertising contributions, or interest. Franchisees must also cover any costs incurred by Chicken Guy in enforcing the terms of the agreement, including collecting monies owed.