Under the Chicken Guy development agreement, is the Developer required to enter into a separate Franchise Agreement for each Franchised Restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Development Rights Only. This Agreement is not a license or a franchise agreement. It does not give Developer the right to operate Chicken Guy! Restaurants or use the System. In addition, this Agreement does not give Developer any right to license others to operate Chicken Guy! Restaurants or use the System. This Agreement only gives Developer the opportunity to enter into Franchise Agreements for the operation of Franchised Restaurants at locations in the Development Territory approved by Chicken Guy. Each Franchised Restaurant developed pursuant to this Agreement shall be established and operated only in strict accordance with a separate Franchise Agreement.
Within 90 days after Chicken Guy approves the site, Developer shall sign and return the Franchise Agreement (along with the Initial Franchise Fee) to Chicken Guy.
Chicken Guy will then sign the Franchise Agreement and return a fully-executed original of the Franchise Agreement to Developer.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a Development Agreement does not grant the developer the right to operate Chicken Guy restaurants. Instead, it provides the developer with the opportunity to enter into separate Franchise Agreements for each restaurant they plan to establish within the designated Development Territory. Each Chicken Guy restaurant must be established and operated strictly in accordance with its own Franchise Agreement.
Specifically, the developer is required to sign and return the Franchise Agreement, along with the initial franchise fee, to Chicken Guy within 90 days after the site for a restaurant is approved. Chicken Guy will then countersign the agreement and return a fully executed copy to the developer. This process ensures that each location operates under a distinct agreement tailored to the specific site and current franchise terms.
This requirement is standard practice in the franchise industry, as it allows the franchisor to maintain control over each individual location while enabling developers to expand their presence within an exclusive territory. It also allows Chicken Guy to update the Franchise Agreement for subsequent locations to reflect changes in the system or legal requirements. The initial franchise fee is due upon the execution of each franchise agreement.