Are there any exceptions to the restriction on competitive businesses for existing restaurant operations of a Chicken Guy franchisee?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
This restriction shall not apply to Franchisee's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor shall it apply to other restaurants operated by Franchisee that are franchised by Chicken Guy or its affiliates.
Following the expiration or earlier termination of the term of this Agreement, this restriction shall apply within the Protected Area and within 2 miles of any then-existing Chicken Guy!
Restaurant, except as otherwise approved in writing by Chicken Guy.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, there are exceptions to the restriction on competitive businesses for existing restaurant operations of a Chicken Guy franchisee. Specifically, the restriction on competitive businesses does not apply to a franchisee's existing restaurant or foodservice operations if they are identified in the attached Data Sheet. This means that if a franchisee already owns and operates a restaurant business before signing the Chicken Guy franchise agreement, and that business is listed on the Data Sheet, the franchisee can continue to operate that existing business without violating the non-compete clause.
Furthermore, the restriction does not apply to other restaurants operated by the franchisee that are franchised by Chicken Guy or its affiliates. This implies that a franchisee can own and operate multiple Chicken Guy franchises or other restaurant franchises affiliated with Chicken Guy without being in violation of the non-compete agreement. This allows franchisees to expand their business portfolio within the Chicken Guy system or its affiliated brands.
After the franchise agreement expires or is terminated, the restriction on competitive businesses applies within the Protected Area and within 2 miles of any then-existing Chicken Guy restaurant, unless Chicken Guy provides written approval otherwise. This post-term restriction is a common practice in franchising to protect the brand's market share and customer base. However, the exceptions for existing businesses identified in the Data Sheet and other Chicken Guy franchises provide some flexibility for franchisees.
It is important for prospective franchisees to carefully review the Data Sheet and understand the scope of any existing restaurant operations they own to ensure compliance with the franchise agreement. Additionally, franchisees should seek written approval from Chicken Guy for any activities that may potentially conflict with the non-compete clause to avoid future disputes.