Under what circumstances is the Addendum to the Chicken Guy Restaurant Franchise Agreement required for Maryland franchisees executed?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1. The provisions of this Addendum form an integral part of, and are incorporated into the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Franchisee was made in the State of Maryland; (B) Franchisee is a resident of the State of Maryland; and/or (C) the Franchised Restaurant will be located and/or operated, and/or all or part of the Protected Area will be located, in the State of Maryland.
- 2. Fees. The following language is added to the end of Section 7. A. of the Franchise Agreement:
Based upon Chicken Guy's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by Franchisee shall be deferred until Chicken Guy completes its pre-opening obligations under this Agreement.
3. Releases. The following sentence is added to the end of Sections 2.B.(2)(e), 19.B.(5) and 20:
This release shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
4. Choice of Law. The following sentence is added to the end of Section 31.C:
Notwithstanding the foregoing, the Maryland Franchise Registration and Disclosure Law shall govern any claim arising under that Law.
5. Choice of Venue. The following sentence is added to the end of Section 31.D.:
Notwithstanding the foregoing, Franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
6. Statute of Limitations. The following sentence is added to the end of Section 31.I.:
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
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, the Addendum to the Chicken Guy Restaurant Franchise Agreement is required for Maryland franchisees under specific circumstances. This addendum becomes an integral part of the Franchise Agreement when the offer or sale of a franchise was made in the state of Maryland, if the franchisee is a resident of Maryland, or if the franchised restaurant is to be located and/or operated, or if any part of the protected area is located in Maryland.
This addendum also addresses specific legal considerations related to Maryland franchise law. For example, based on Chicken Guy's financial condition, the Maryland Securities Commissioner requires a financial assurance. As a result, all initial fees and payments owed by the franchisee are deferred until Chicken Guy completes its pre-opening obligations under the agreement. This provides a level of financial protection to the franchisee during the initial phase of the franchise.
Furthermore, the addendum clarifies that any releases signed by the franchisee do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. It also specifies that the Maryland Franchise Registration and Disclosure Law governs any claims arising under that law, and franchisees can bring lawsuits in Maryland for claims arising under this law. The addendum also states that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
These stipulations ensure that Maryland franchisees retain their rights and protections under state law, regardless of any conflicting terms in the standard franchise agreement. The inclusion of this addendum demonstrates Chicken Guy's compliance with Maryland franchise regulations and provides additional clarity and security for franchisees operating in Maryland.