What standards does Chicken Guy apply to judge the financial capabilities of the developer?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
ice operations. Accordingly, neither Franchisee nor any immediate or remote successor to any part of Franchisee's interest in this Agreement, nor any individual, partnership, corporation or other legal entity which directly or indirectly controls Franchisee shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any interest in Franchisee, this Agreement, the Franchise, the Franchised Restaurant, the assets of the Franchised Restaurant, the Franchised Location or any other assets pertaining to Franchisee's operations under this Agreement (collectively "Transfer") without the prior written consent of Chicken Guy, which consent shall not be unreasonably withheld.
(2) Except as otherwise provided in this Agreement, any purported Transfer, by operation of law or otherwise, not having the prior written consent of Chicken Guy shall be null and void and shall constitute a material breach of this Agreement, for which Chicken Guy may terminate this Agreement without providing Franchisee an opportunity to cure the breach.
B. Transfer Considerations. Franchisee shall advise Chicken Guy in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee, and submit a copy of all contracts and all other agreements or proposals, and all other information requested by Chicken Guy, relating to the proposed Transfer. If Chicken Guy does not exercise its right of first refusal, the decision as to whether or not to approve a proposed Transfer shall be made by Chicken Guy in its reasonable business discretion and shall include numerous factors deemed relevant by Chicken Guy. These factors may include, but will not be limited to, the following:
(1) The proposed transferee (and if the proposed transferee is other than an individual, such owners of an interest in the transferee as Chicken Guy may request) must demonstrate that it has extensive experience in high quality restaurant operations of a character and complexity similar to the restaurants franchised by Chicken Guy or its affiliates; meets the managerial, operational, experience, quality, character and business standards for a franchisee promulgated by Chicken Guy from time to time; possesses a good character, business reputation and credit rating; has an organization whose management culture is compatible with Chicken Guy's management culture; and has adequate financial resources and working capital to meet Franchisee's obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the brand assesses a prospective developer's financial capabilities based on several factors. Chicken Guy requires developers to demonstrate sufficient financial capabilities to properly develop, operate, and maintain the proposed franchised restaurant, using standards consistent with criteria Chicken Guy uses in comparable market areas.
Chicken Guy requires developers to furnish financial statements and other information regarding themselves or their affiliated entity, including investment and financing plans for the proposed franchised restaurant. Chicken Guy will consider numerous factors it deems relevant. These factors include whether the proposed transferee has adequate financial resources and working capital to meet the developer's obligations.
Chicken Guy also evaluates whether the sales price would jeopardize the transferee's ability to develop, maintain, operate, and promote the franchised restaurants, as well as meet financial obligations to Chicken Guy, third-party suppliers, and creditors. Chicken Guy may also require a reasonable sum of money to be placed in escrow to ensure all obligations are satisfied.