Under the Chicken Guy Development Agreement, which sections cover site selection and acquisition/lease obligations?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Franchisee's Responsibility. Franchisee shall select the site from within, the geographic area identified in the attached Data Sheet ("Site Selection Area"). Prior to the site approval deadline set forth in in the attached Data Sheet ("Site Approval Deadline"), Franchisee shall obtain site approval from Chicken Guy for the Franchised Restaurant. If Chicken Guy has not approved a site within this time period, Chicken Guy, at its option, may terminate this Agreement pursuant to Section 22. Franchisee assumes all cost, liability and expense for locating, obtaining and developing a site for the Franchised Restaurant and constructing and equipping the Franchised Restaurant in accordance with Chicken Guy's standards at an approved site. Chicken Guy reserves the right to require Franchisee to engage the services of a real estate broker approved by Chicken Guy to assist Franchisee in identifying and securing a site for the Franchised
Restaurant. Franchisee shall not make any binding commitments to purchase or lease a site until Chicken Guy has approved the site in writing.
- B. Site Selection Assistance. Chicken Guy will provide Franchisee with the following site selection assistance: (1) Chicken Guy's site selection guidelines and, as Franchisee may request, a reasonable amount of consultation with respect thereto; and (2) such on-site evaluation as Chicken Guy may deem advisable as part of its evaluation of Franchisee's request for site approval. Chicken Guy reserves the right to retain the services of third party real estate analysts to evaluate proposed sites for Chicken Guy! Restaurants.
- C. Real Estate Site Application. Franchisee shall submit to Chicken Guy a Real Estate Site Application (containing that information as Chicken Guy may reasonably require) for a proposed site which Franchisee reasonably believes to conform to site selection criteria that Chicken Guy establishes from time to time for demographic characteristics, traffic patterns, parking, character of the neighborhood, competition from other businesses in the area, the proximity to other businesses (including restaurants operated or franchised by Chicken Guy or its affiliates), the nature of other businesses in proximity to the site and other commercial characteristics (including the purchase price, rental obligations and other lease terms for the proposed site) and the size, appearance, other physical characteristics, and a site plan of the premises.
- D. Business Plan. Franchisee shall develop and submit to Chicken Guy, simultaneously with the submission of the Real Estate Site Application, a three-year business plan ("Business Plan") outlining the actions that Franchisee will take to ensure that Franchisee's operation and management of the Franchised Restaurant are in compliance with Chicken Guy's standards. During the term of this Agreement, Franchisee agrees to revise the Business Plan as required by Chicken Guy and further agrees to implement that Business Plan as approved by Chicken Guy.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 23–25)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, several sections within the Development Agreement outline the responsibilities and procedures for site selection and acquisition. Section 3 details the franchisee's responsibility in selecting a site within a defined geographic area, obtaining Chicken Guy's approval by a specified deadline, and bearing all costs associated with securing and developing the site. Chicken Guy retains the right to mandate the franchisee to use an approved real estate broker. The franchisee is explicitly prohibited from making any binding commitments to purchase or lease a site before receiving written approval from Chicken Guy.
Chicken Guy also provides site selection assistance, including guidelines and consultation, and may conduct on-site evaluations. Franchisees must submit a Real Estate Site Application with detailed information about the proposed site, covering demographic characteristics, traffic patterns, parking, neighborhood character, competition, proximity to other businesses, and the site's physical characteristics, including purchase price, rental obligations, and lease terms. Additionally, franchisees must develop and submit a three-year business plan outlining their operational and management strategies for the franchised restaurant, subject to Chicken Guy's revisions and approval.
Item 11 of the FDD also references sections of the Development Agreement related to site selection. Specifically, it mentions that Chicken Guy will provide site selection guidelines and consultation, as well as on-site evaluation, as detailed in Section 5.B of the Development Agreement. Furthermore, Section 5.E of the Development Agreement stipulates that Chicken Guy will advise the franchisee in writing about the approval of a proposed site within 15 days of receiving the Real Estate Site Application, business plan, and any additional required information. Failure to respond within this timeframe is deemed a denial of approval. These sections collectively define the process and obligations for both the franchisee and Chicken Guy in selecting and securing suitable locations for new restaurants.