After termination of the Development Agreement, is a Chicken Guy developer prohibited from operating under a name that gives the impression of being connected with Chicken Guy, except for restaurants franchised by Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Developer Prohibited from Engaging in Certain Conduct. Developer shall not, except with respect to a restaurant franchised by Chicken Guy or its affiliates which is then open and operating pursuant to an effective franchise agreement: (1) operate or do business under any name or in any manner that might tend to give the public the impression that Developer is connected in any way with Chicken Guy or its affiliates or has any right to use the System or the Proprietary Marks; (2) make, use or avail itself of any of the materials or information furnished or disclosed by Chicken Guy or its affiliates under this Agreement or disclose or reveal any such materials or information or any portion thereof to anyone else; or (3) assist anyone not licensed by Chicken Guy or its affiliates to construct or equip a foodservice outlet substantially similar to a Chicken Guy! Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a developer is restricted from certain conduct after the termination of the Development Agreement. Specifically, the developer cannot operate under any name or in any manner that would lead the public to believe they are connected with Chicken Guy or have the right to use their system or proprietary marks. This restriction does not apply to restaurants franchised by Chicken Guy that are open and operating under an effective franchise agreement.
This means that if a developer's agreement is terminated, they cannot open a competing restaurant that uses a similar name or branding that might confuse customers into thinking it is still affiliated with Chicken Guy. The developer also cannot use any of Chicken Guy's materials or information provided during the agreement, nor can they assist others in setting up a restaurant similar to Chicken Guy, unless those restaurants are also Chicken Guy franchises.
This provision protects Chicken Guy's brand and prevents former developers from leveraging the brand's goodwill to operate competing businesses. It ensures that customers can clearly distinguish between official Chicken Guy franchises and other establishments, maintaining the integrity of the Chicken Guy brand and system. The developer must also return all confidential materials provided by Chicken Guy, reinforcing the separation between the terminated developer and the Chicken Guy franchise system.