Are there any exceptions to the modification clause in the Chicken Guy Development Agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN DEVELOPMENT AGREEMENT | SUMMARY |
|---|---|---|
| a. Length of the development term | Section 1.A. | The term is from the date of execution of the Development Agreement to the date that you sign a lease or purchase the site for the last Franchised Restaurant that you are required to develop under the Development Schedule. |
| PROVISION | SECTION IN DEVELOPMENT AGREEMENT | SUMMARY |
| r. Non-competition covenants after the franchise is terminated or expires | Section 12.C. | No activity as described in q. above for one year within your Development Territory, within two miles of its border and within two miles of any then- existing Chicken Guy! Restaurant. If you violate the post-termination non-competition provisions, you must pay liquidated damages equal to our then- current Initial Franchise Fee and 8% of the Gross Sales of the competing business until the expiration of the non-competition period (subject to state law). |
| s. Modification of the | Section 20 | No modification generally without signed |
| agreement | agreement, but we may modify the System. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Section 20 of the Development Agreement states that modifications generally require a signed agreement. However, Chicken Guy retains the right to modify the System itself.
Notably, the enforceability of certain provisions within the Development Agreement, including the modification clause, may be subject to state law. For instance, addenda for franchisees in California, Minnesota, Maryland and New York indicate that certain state laws may supersede the agreement's terms. This means that depending on the franchisee's location, specific state statutes could impact the modification clause's application.
Prospective Chicken Guy franchisees should be aware that while the Development Agreement stipulates that modifications typically require a signed agreement, this is not absolute. Chicken Guy can unilaterally modify the System. Furthermore, state laws could introduce additional exceptions or limitations to the enforceability of the modification clause, potentially offering franchisees additional protections or altering the agreement's terms based on their location.