Under what conditions can a Chicken Guy franchisee relocate the franchised restaurant without paying an additional initial franchise fee or transfer fee if they lose possession of the location?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if, during the term of this Agreement, Franchisee, through no act or failure to act on its part (except the failure to extend the lease for the Franchised Location through the Initial Term of this Agreement), loses the right to possession of the Franchised Location, the Initial Term shall expire as of the date of Franchisee's loss of the right to possession. If the right to possession is lost through no act or failure to act on Franchisee's part however, Franchisee may relocate the Franchised Restaurant (without paying any additional initial franchise fee or transfer fee) at its expense, and the Initial Term shall not expire if: (a) Chicken Guy approves the new location; (b) Franchisee
constructs and equips a Franchised Restaurant at the new location in accordance with the then-current System standards and specifications; (c) a Franchised Restaurant at the new location is open to the public for business within 8 months after Franchisee's loss of possession of the Franchised Location; and (d) Franchisee reimburses Chicken Guy for all reasonable expenses actually incurred by Chicken Guy in connection with the approval of the new location.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a franchisee may be able to relocate their restaurant without incurring additional initial franchise or transfer fees if they lose possession of their current location through no fault of their own. This exception to relocation fees is conditional and requires adherence to specific stipulations.
To qualify for this fee waiver, the loss of possession must occur through no act or failure to act on the franchisee's part, except for the failure to extend the lease for the Franchised Location through the Initial Term of this Agreement. The franchisee must secure Chicken Guy's approval for the new location and construct and equip a restaurant at the new site that meets the then-current System standards and specifications. The relocated Chicken Guy restaurant must be open to the public within eight months of losing possession of the original location.
Furthermore, the franchisee is responsible for reimbursing Chicken Guy for all reasonable expenses actually incurred by Chicken Guy in connection with the approval of the new location. Meeting these conditions allows the franchisee to continue operations without the burden of additional fees, provided they act promptly and in accordance with Chicken Guy's requirements for the new location and its timely opening.