Under what conditions regarding the Illinois Franchise Disclosure Act would a Chicken Guy franchisee be obligated to pay damages?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
The conditions of this bond are that if the Principal, its agent or employees shall:
- Comply with the Illinois Franchise Disclosure Act and all rules and orders promulgated thereunder; and
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- Pay all damages suffered by any person by reason of the violation of the Illinois Franchise Disclosure Act or any rules or orders promulgated thereunder or any acts, rules or orders amendatory thereof and/or supplementary thereto, or hereafter enacted, or by reason of any misrepresentation, deceit, fraud or omission to state a material fact necessary in order to make any statement made in the light of the circumstances under which such statement was made, not misleading, including, but not limited to, the failure to disclose, as required by Illinois Franchise Disclosure Act and the rules and regulations promulgated thereunder, the true financial condition of franchisor; and
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, a Chicken Guy franchisee in Illinois could be obligated to pay damages if they violate the Illinois Franchise Disclosure Act or any rules or orders associated with it. This also applies to any amendments or supplements to the Act.
Specifically, the franchisee may be liable for damages if they engage in misrepresentation, deceit, fraud, or omission of material facts that are necessary to provide a non-misleading statement under the circumstances. This includes failing to disclose the true financial condition of Chicken Guy as required by the Illinois Franchise Disclosure Act and its associated rules and regulations.
The surety bond ensures that Chicken Guy will comply with the Illinois Franchise Disclosure Act. The bond is for $50,000, and it is intended to cover damages to purchasers of Chicken Guy franchises in Illinois if Chicken Guy violates the Act. This bond remains in effect for four years after the date it was executed.