Is there a geographical limitation on the restriction against owning a competitive restaurant business during the Chicken Guy Development Term?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Development Term, there is no geographical limitation on this restriction.
Following the expiration or earlier termination of the Development Term, this restriction shall apply within the Development Territory, within 2 miles of the border of the Development Territory and within 2 miles of any then-existing Chicken Guy!
Restaurant, except as otherwise approved in writing by Chicken Guy.
This restriction shall not apply to Developer'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 Developer that are franchised by Chicken Guy or its affiliates.
- (3) If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, there is no geographical limitation on the restriction against owning a competitive restaurant business during the Development Term. This means that while a developer is under contract to develop Chicken Guy restaurants, they are restricted from owning or being involved with any competitive restaurant business anywhere.
Following the expiration or earlier termination of the Development Term, the restriction changes. At that point, the restriction applies within the Development Territory, within 2 miles of the border of the Development Territory, and within 2 miles of any then-existing Chicken Guy restaurant. This post-term restriction is more limited geographically than the restriction during the Development Term.
It is important to note that these restrictions do not apply to any existing restaurant or foodservice operations the developer has that are identified in the attached Data Sheet, nor do they apply to other restaurants operated by the developer that are franchised by Chicken Guy or its affiliates. If any part of these restrictions is found to be unreasonable in time or distance, the time or distance may be reduced by the court to what is deemed reasonable.