Under what conditions will Chicken Guy refrain from operating or licensing others to operate Chicken Guy restaurants in the Development Territory during the Development Term?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. The System (including the products sold under the Proprietary Marks) has been developed, and is designed, to function effectively in a wide variety of retail environments, many of which are not practically available to Developer.
Accordingly, Chicken Guy reserves to itself the rights to: (1) operate, and license others to operate, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" and/or utilizing the System in the Development Territory that are located in airports, train stations, bus stations, service plazas, stadiums, arenas, convention centers, military facilities, gas stations, convenience stores, schools, colleges, universities, hospitals, theme parks, office buildings, food courts, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos or any similar captive market location not reasonably available to Developer; (2) award national or regional licenses to third parties to sell products under the name and mark "CHICKEN GUY!" in foodservice facilities primarily identified by the third party's trademark; (3) develop and operate, and license others to develop and operate, restaurants other than restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" and/or utilizing the System in the Development Territory; (4) merchandise and distribute products identified by some or all of the Proprietary Marks in the Development Territory through any other method or channel of distribution; and (5) sell and distribute products identified by some or all of the Proprietary Marks in the Development Territory to restaurants other than restaurants identified in whole or in part by the name and mark "CHICKEN GUY!," provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
B. Except as reserved in the preceding paragraph, Chicken Guy will not, during the Development Term, operate, or license others to operate, restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" in the Development Territory, provided Developer is in compliance with the terms of this Agreement and any other agreements with Chicken Guy or its affiliates and is current on all obligations due Chicken Guy and its affiliates.
C. The restrictions contained in this Section 2 apply only to Chicken Guy and do not apply to restaurants identified in whole or in part by the name and mark "CHICKEN GUY!" under construction or in operation in the Development Territory as of the date of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy will generally not operate or license others to operate Chicken Guy restaurants within the Development Territory during the Development Term if the developer is in compliance with the terms of the Development Agreement and any other agreements with Chicken Guy or its affiliates, and is current on all obligations due to Chicken Guy and its affiliates. However, Chicken Guy reserves the right to operate or license others to operate Chicken Guy restaurants in specific locations within the Development Territory, even during the Development Term. These locations include airports, train stations, bus stations, service plazas, stadiums, arenas, convention centers, military facilities, gas stations, convenience stores, schools, colleges, universities, hospitals, theme parks, office buildings, food courts, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos or any similar captive market location not reasonably available to the Developer.
Chicken Guy also reserves the right to award national or regional licenses to third parties to sell products under the Chicken Guy name and mark in foodservice facilities primarily identified by the third party's trademark. They can also develop and operate, and license others to develop and operate, restaurants other than Chicken Guy restaurants within the Development Territory. Additionally, Chicken Guy can merchandise and distribute products identified by the Proprietary Marks in the Development Territory through any other method or channel of distribution, and sell and distribute products identified by the Proprietary Marks in the Development Territory to restaurants other than Chicken Guy restaurants, provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
These exceptions mean that while a developer has a limited exclusive right to develop Chicken Guy restaurants in a specific territory, Chicken Guy retains significant control over where and how the brand is represented, especially in non-traditional venues. A prospective franchisee should carefully consider these exceptions and how they might impact their development plans and potential revenue within their territory. It is important to note that these restrictions only apply to Chicken Guy and do not affect restaurants using the Chicken Guy name that were already under construction or in operation within the Development Territory as of the agreement date.