Under what conditions will the Chicken Guy Franchise Agreement automatically terminate?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3. Term. Section 2.A.(2) is deleted and replaced with the following:
- (2) Notwithstanding the foregoing, this Agreement shall automatically terminate if Franchisee's contract to provide foodservice at the Facility terminates or expires without renewal. In addition, Franchisee may terminate this Agreement following 60 days' written notice to Chicken Guy if Franchisee's client at the Facility instructs Franchisee in writing to cease operating the Franchised Restaurant (provided Franchisee has exercised reasonable efforts to arrange a meeting between Franchisee's client and Chicken Guy, if Chicken Guy so elects, to discuss the continued operation of the Franchised Restaurant). If Franchisee's contract to provide foodservice at the Facility permits Franchisee's client to take this action on shorter notice, the notice period provided in that contract shall govern, provided Franchisee has provided Chicken Guy a copy of the relevant contract provision.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Franchise Agreement will automatically terminate if the franchisee's contract to provide foodservice at the facility terminates or expires without renewal. This condition applies specifically when the Chicken Guy restaurant is located within a larger facility, such as an airport or food court, where the franchisee's right to operate is dependent on a separate agreement with the facility owner.
Additionally, the franchisee has the option to terminate the agreement with 60 days' written notice to Chicken Guy if the client at the facility instructs the franchisee in writing to cease operating the franchised restaurant. However, the franchisee must first make reasonable efforts to arrange a meeting between the client and Chicken Guy, if Chicken Guy elects, to discuss the continued operation of the restaurant. If the contract between the franchisee and the facility client allows the client to terminate the foodservice arrangement with less than 60 days' notice, then the shorter notice period specified in that contract will apply, provided that the franchisee has given Chicken Guy a copy of the relevant contract provision.
This clause protects the franchisee in situations where they lose the right to operate at the facility due to actions outside of their direct control. However, it also places a responsibility on the franchisee to inform Chicken Guy of any potential issues and to facilitate communication between Chicken Guy and the facility client to attempt to resolve the situation before terminating the agreement.