Other than Section 16, does the Chicken Guy Franchise Agreement create any third-party beneficiaries?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. The sole relationship between Developer and Chicken Guy is a commercial, arms' length business relationship and, except as provided in Section 16, there are no third party beneficiaries to this Agreement. Developer's business is, and shall be kept, totally separate and apart from any that may be
operated by Chicken Guy. In all public records, in relationships with other persons, and on letterheads and business forms, Developer shall indicate its independent ownership of the Franchised Restaurants and that Developer is solely a franchisee of Chicken Guy. Developer shall not issue any press releases without the prior written approval of Chicken Guy.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the agreement specifies that, except as provided in Section 16, there are no third-party beneficiaries to the agreement. This means that only Chicken Guy and the developer (franchisee) are parties to the agreement and can enforce its terms. No other individual or entity has rights or benefits under the agreement, with the exception of the indemnification clause in Section 16.
This provision clarifies that the relationship between Chicken Guy and the franchisee is a commercial, arms-length business relationship. The franchisee's business operations must be kept separate from those of Chicken Guy, and the franchisee must represent itself as an independent owner of the franchised restaurant. This reinforces the independent contractor status of the franchisee and limits any potential liability for Chicken Guy regarding the franchisee's business activities.
For a prospective franchisee, this clause emphasizes that they cannot rely on the Franchise Agreement to provide any benefits or rights to third parties, such as suppliers, customers, or employees. Any agreements or relationships the franchisee establishes with these parties are solely their responsibility and do not involve Chicken Guy, except as explicitly stated in Section 16 regarding indemnification.