Under what condition will Chicken Guy not authorize the opening of a Franchised Restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for a conditional opening pursuant to Section 6.B., Chicken Guy will not authorize the opening of the Franchised Restaurant unless all the following conditions have been met:
(1) Franchisee is not in material default under this Agreement or any other agreements with Chicken Guy; Franchisee is not in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; Franchisee is not in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant; and for the previous 6 months, Franchisee has not been in default beyond the applicable cure period under any agreement with Chicken Guy.
(2) Franchisee is current on all obligations due Chicken Guy and Franchisee has signed all documents required by Chicken Guy to participate in Chicken Guy's electronic funds transfer program.
(3) Chicken Guy is satisfied that the Franchised Restaurant was constructed and/or renovated substantially in accordance with the Plans approved by Chicken Guy and state and local codes.
(4) If the Franchised Location is leased, Chicken Guy has received a copy of the fully-executed lease.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy will not authorize the opening of a franchised restaurant if certain conditions are not met. Specifically, Chicken Guy requires adherence to several stipulations before granting permission to open. These conditions ensure that the franchisee is in good standing and that the restaurant meets Chicken Guy's standards.
Chicken Guy will withhold authorization if the franchisee is in material default under the Franchise Agreement or any other agreements with Chicken Guy. This also applies if the franchisee is in default beyond the cure period for any real estate lease, equipment lease, financing instrument, or with any vendor or supplier. Furthermore, if the franchisee has been in default beyond the applicable cure period under any agreement with Chicken Guy within the previous six months, authorization will be denied.
Additionally, Chicken Guy requires that the franchisee is current on all obligations due to Chicken Guy and has signed all necessary documents for participation in Chicken Guy's electronic funds transfer program. The franchised restaurant must be constructed or renovated substantially in accordance with the plans approved by Chicken Guy and in compliance with state and local codes. If the location is leased, Chicken Guy must have a copy of the fully-executed lease. Meeting these conditions is crucial for a franchisee to gain the necessary authorization to open a Chicken Guy restaurant.