Under what conditions can Chicken Guy terminate the franchise agreement with cause?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
es from membership in such association or exchange.
3. Item 5, Additional Disclosure. The following statement is added to Item 5.
The Department of Financial Protection and Innovation requires Chicken Guy to provide a financial assurance for California franchisees, pursuant to which Chicken Guy has posted a surety bond in the amount of $50,000. The bond is on file with the Department of Financial Protection and Innovation.
4. Item 17, Additional Disclosures. The following statements are added to Item 17:
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning transfer, termination or non-renewal of the franchise and development agreements. If the agreements contain a provision that is inconsistent with the law, the law will control.
The franchise and development agreements provide for termination upon bankruptcy. These provisions may not be enforceable under federal bankruptcy law (11 U.S.C.A. § 101, et seq.).
The franchise and development agreements provide for application of the laws of Florida. This provision may not be enforceable under California law.
The franchise and development agreements contain a choice of forum provision. This provision may not be enforceable under California law.
The franchise and development agreements contain a covenant not to compete that extends beyond the termination of the franchise. These provisions may not be enforceable under California law.
The franchise and development agreements contain liquidated damages clauses. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
You must sign a general release upon execution of the franchise and development agreements, if you transfer the rights granted under those agreements and if you renew your franchise under the franchise agreement. These provisions may not be enforceable under California law. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 21000 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
To obtain a liquor license in California, you must apply in-person with the State of California Department of Alcoholic Beverage Control, at your district office ("Department"). The Department will conduct an investigation, and you are responsible for posting a public notice and furnishing any additional notices or information requested by the Department. An application for a liquor license in California can take from 55 to 175 days or more to be approved, depending on the circumstances. For more information, please visit https://www.abc.ca.gov/ or call the Department at 916.419.2500.
5. Item 22, Additional Disclosure.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
Based on the 2025 Chicken Guy Franchise Disclosure Document, specific conditions for termination with cause are not detailed in the provided excerpts. However, the document does mention circumstances related to termination and non-renewal, particularly concerning franchisees in certain states like Minnesota and California.
For Minnesota franchisees, Chicken Guy must comply with Minnesota Statute § 80C.14, Subdivisions 3, 4, and 5, which generally requires 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal, except in certain cases. This suggests that termination with cause would involve a notice period and an opportunity to correct the issue, though the specific causes are not listed here.
For California franchisees, the FDD notes that California Business and Professions Code Sections 20000 through 20043 provide rights concerning transfer, termination, or non-renewal, and that if the franchise agreement is inconsistent with this law, the law will take precedence. The document also mentions that franchise and development agreements provide for termination upon bankruptcy, though this may not be enforceable under federal bankruptcy law. Additionally, the FDD states that a franchisor has the right to acquire the assets of a franchisee for their market or appraised value if the franchisee has breached the lawful provisions of the franchise agreement and failed to cure the breach.
Given the lack of explicit detail on what constitutes termination with cause, prospective Chicken Guy franchisees should directly ask the franchisor for a comprehensive list of conditions that could lead to termination. Understanding these conditions is crucial for assessing the risks and responsibilities associated with the franchise agreement.