Hck_Hot_Chicken 2025 Franchise FAQ - FDD Ninja

Question 1

What conditions must the Area Developer satisfy to exercise the right of additional development with Hck Hot Chicken?

Accepted Answer

Area Developer's right to additional development described in Section 4.1 shall be subject to Area Developer's fulfillment of the following conditions precedent:

- 4.4.1 Area Developer (and each of its Affiliates which have developed or operate Restaurants in the Development Area) shall have fully performed all of its obligations under this Development Agreement and all other agreements between Franchisor and Area Developer (or the applicable Affiliate).

- 4.4.2 Area Developer shall have demonstrated to Franchisor Area Developer's financial capacity to perform the Additional Development Obligations set forth in the area development agreement.

In determining if Area Developer is financially capable, Franchisor will apply the same criteria to Area Developer as it applies to prospective area developer franchisees at that time.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 2

In the Hck Hot Chicken franchise agreement, what is the franchisee required to do if they want to assign the agreement?

Accepted Answer

- 14.3.2 Assignment, Death, or Incapacity.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 3

What is the Hck Hot Chicken franchisee required to include in their request for consent to assignment?

Accepted Answer

Without waiving any other rights provided for herein or otherwise, Franchisor hereby waives its ROFR if the proposed transferee/assignee is an immediate family member of Franchisee;

- (d) The Franchisee shall not be in default under the terms of this Agreement (or any other related agreement), the HCK Hot Chicken Brand Standards Manual or any other obligations owed Franchisor, and all of its then-due monetary obligations to Franchisor shall have been paid in full;

- (e) The Franchisee, and its Owners, if the Franchisee is an Entity, shall execute a general release under seal, in a form prescribed by Franchisor, of any and all claims against Franchisor, its Affiliates, Owner(s), directors, officers, agents and employees;

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 4

Regarding Hck Hot Chicken, what agreements should be reviewed by the franchisee?

Accepted Answer

As you know, Hot Chikn Kitchn LLC ("we" or "us"), and you are preparing to enter into a Franchise Agreement and Area Development Agreement, if applicable, for the operation of a HCK Hot Chicken franchise. The purpose of this questionnaire is to determine whether any statements or promises were made to you that we have not authorized or that may be untrue, inaccurate, or misleading, to be certain that you have been properly represented in this transaction, and to be certain that you understand the limitations on claims you may make by reason of the purchase and operation of your franchise. **You cannot sign or date this questionnaire the same day as the Receipt for the Franchise Disclosure Document, but you must sign and date it the same day you sign the Franchise Agreement and Area Development Agreement, if applicable.** Please review each of the following questions carefully and provide honest responses to each question. If you answer "No" to any of the questions below, please explain your answer in the table provided below.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 5

What were the three largest expense categories for the Hck Hot Chicken Brand Fund during the 2024 fiscal year, and what amounts were spent on each?

Accepted Answer

ontribute to the Brand Fund on the same basis as franchisee Restaurants.

During the 2024 fiscal year the Brand Fund raised \$160,049 and spent \$\$131,572 on Producti

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING (FDD pages 28–37)

Question 6

What was the total number of Hck Hot Chicken outlets at the start of 2023?

Accepted Answer

023 | 0 |
|  | 2024 | 1 |
![](_page_52_Picture_0.jpeg)

# Table No. 3 **Status of Franchised Outlets** For Years 2022 - 2024

|  |  |  |  |  |  |  | Ceased |  |
|---|---|---|---|---|---|---|---|---|
|  |  | Outlets at | Outlets |  | Non- | Reacquired | Operations - | Outlets at |
| State | Year | Start of the Year | Opened | Terminations | Renewals | by Franchisor | Other Reasons | End of the Year |
|  |  |  |  |  |  |  |  |  |
| FL | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 1 | 1 |
| NJ | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 1 | 1 |
| NY | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| NC | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| TX | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| VA | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 4 | 0 | 0 | 0 | 0 | 4 |
|  | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Total Outlets | 2023 | 2 | 3 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 6 | 0 | 0

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 52–54)

Question 7

Are Hck Hot Chicken company-owned restaurants required to contribute to advertising cooperatives, and if so, on what basis?

Accepted Answer

You may be required to participate in any local or regional advertising cooperative for HCK Hot Chicken Restaurants that is established. The area of each local and regional advertising cooperative will be defined by us, based on our assessment of the area. Franchisees in each cooperative will contribute an amount to the cooperative of up to two percent (2%) of monthly Gross Sales for each Restaurant that the franchisee owns that exists within the cooperative's area, which contribution may be applied toward the franchisee's Local Advertising Requirement. Each Restaurant that we or our affiliate owns that exists within the cooperative's area will contribute to the cooperative on the same basis as franchisees. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions from each member. We may require that each cooperative operate with governing documents, which will be available for review upon reasonable request from cooperative franchisees. Each cooperative must prepare annual unaudited financial statements,and such statements will be provided for review to each member of such cooperative. Cooperatives may not use advertising, marketing, or promotional plans or materials without our prior written consent. We reserve the right to form, change, dissolve, or merge any advertising cooperative formed in the future. If we elect to form such cooperatives, or if such cooperatives already exist near your territory, you will be required to participate in compliance with the provisions of the Brand Standards Manual, which we may periodically modify in our discretion.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING (FDD pages 28–37)

Question 8

What is the primary difference between a 'Traditional Restaurant' and a 'Non-Traditional Restaurant' for an Hck Hot Chicken franchise?

Accepted Answer

A "Traditional Restaurant" is a business premise that exists primarily as a Restaurant, at a venue other than a Non-Traditional Venue; however, a Traditional Restaurant may also have other types of HCK approved cobranded businesses located in it. In these circumstances the Restaurant is the primary business. A Traditional Restaurant may also have a drive-thru and pickup window. Unless otherwise stated, Non-Traditional Restaurants and Traditional Restaurants are referred to collectively with "Restaurants" and "HCK Hot Chicken Restaurants" in this Franchise Disclosure Document.

If your HCK Hot Chicken Restaurant is located in a "Non-Traditional Venue," it will be referred to as a "Non-Traditional Restaurant." A "Non-Traditional Venue" is a facility operated under the HCK Hot Chicken trademarks located within another primary business or in conjunction with other businesses or at institutional settings, including toll roads, train stations, amusement parks, and all properties controlled by the amusement park, travel stations, hotels and motels, ships, ports, piers, casinos, stadiums, airports, theatres, big box retailers, building supply stores, warehouse club stores, colleges and universities, schools, hospitals, military and other governmental facilities, office or in-plant food service facilities, shopping mall food courts operated by a master concessionaire, grocery stores, outlet malls, supermarkets and convenience stores, and any site for which the lessor, owner or operator shall have indicated its intent to prefer or limit the operation of its food service facilities to a master concessionaire or contract food service provider. If you sign a Franchise Agreement for a Non-Traditional Restaurant, you must sign (in addition to our standard Franchise Agreement) the addendum attached in Exhibit I ("Non-Traditional Location Addendum"). Non-Traditional Restaurants may share their premises with other businesses, within a host facility, and may provide limited menu items and limited or no delivery.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENT, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 9

What types of competitive food service businesses might a Hck Hot Chicken franchisee encounter?

Accepted Answer

The primary market for the products and services offered by HCK Hot Chicken Restaurants is the general public. The products and services offered by HCK Hot Chicken Restaurants are not seasonal. The restaurant market, as a whole, is well-developed and highly competitive, and includes retail units, mobile food trucks, and kiosks selling various types of food. You may have to compete with numerous other independent and chain-affiliated restaurants, some of which may be franchised. Many restaurant franchise systems, in particular, have already established national and international brand recognition.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENT, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 10

When is the initial franchise fee due for a Hck Hot Chicken franchise, assuming the franchisee is not signing under an Area Development Agreement?

Accepted Answer

# **Franchise Agreement**

The "Initial Franchise Fee" for a HCK Hot Chicken Restaurant, whether a Traditional Restaurant or a Non-Traditional Restaurant, is \$40,000. The Initial Franchise Fee is payment for certain pre-opening assistance that we provide to allow you to open your HCK Hot Chicken Restaurant, and also offsets some of our franchisee recruitment expenses. The Initial Franchise Fee is uniform and, unless you are signing a Franchise Agreement under an Area Development Agreement, payable when you sign each Franchise Agreement (see Area Development Agreement section below for Initial Franchise Fee payment schedule for Restaurants opened under an Area Development Agreement). The Initial Franchise Fee is non-refundable for Traditional Restaurants and may be partially refundable for Non-Traditional Restaura

Source: Item 5 — INITIAL FEES (FDD pages 12–13)

Question 11

According to the Hck Hot Chicken Development Agreement, are representations made by the Area Developer considered part of the entire agreement?

Accepted Answer

This Development Agreement and the HCK Hot Chicken Brand Standards Manual contain all the terms and conditions agreed upon by the parties with reference to the subject matter of this Development Agreement.

No other agreements concerning the subject matter of this Development Agreement, oral or otherwise, shall be deemed to exist or to bind any of the parties.

All prior or contemporaneous agreements, understandings and representations relating to the subject matter of this Development Agreement, are merged and are expressly and superseded by this Development Agreement, except such representations as are made in the franchise disclosure document delivered to Area Developer and any representations made by Area Developer in acquiring this Development Agreement.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 12

According to the Hck Hot Chicken franchise agreement, what happens if the franchisee does not offer the franchisor a right of first refusal?

Accepted Answer

Any material change in the terms of an offer prior to closing (or the failure to close the transaction within 60 days following the written notice provided by Franchisee) shall cause it to be deemed a new offer, subject to the same right of first refusal by Franchisor, or its third party designee, as in the case of the initial offer.

Franchisor's failure to exercise such ROFR shall not constitute consent to the transfer or a waiver of any other provision of this Agreement, including any of the requirements of this Section with respect to the proposed transfer.

The ROFR is fully assignable by Franchisor.

Without waiving any other rights provided for herein or otherwise, Franchisor hereby waives its ROFR if the proposed transferee/assignee is an immediate family member of Franchisee;

- (d) The Franchisee shall not be in default under the terms of this Agreement (or any other related agreement), the HCK Hot Chicken Brand Standards Manual or any other obligations owed Franchisor, and all of its then-due monetary obligations to Franchisor shall have been paid in full;

- (e) The Franchisee, and its Owners, if the Franchisee is an Entity, shall execute a general release under seal, in a form prescribed by Franchisor, of any and all claims against Franchisor, its Affiliates, Owner(s), directors, officers, agents and employees;

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 13

What alternative standards and specifications might apply to a Hck Hot Chicken Non-Traditional Restaurant?

Accepted Answer

- 12. **HCK HOT CHICKEN NON-TRADITIONAL RESTAURANT STANDARDS**.The following is hereby added as a new Section 7.18 to the Franchise Agreement:

- "7.18 Non-Traditional Restaurant Acknowledgements.

Franchisee acknowledges that the signs, equipment configuration, menu, products, services, size, specifications, and appearance of the Non-Traditional Restaurant operated pursuant to this Agreement may significantly differ from that of a Traditional Restaurant and will be subject to alternative standards and specifications developed and made available by Franchisor.

Changes in the standards, specifications, and procedures applicable to the operation of the Non- Traditional Restaurant and related common areas may become necessary and desirable from time to time, and Franchisee agrees to accept and comply with such modifications and revisions.

The adoption of such standards shall be solely at the discretion of Franchisor."

- 13. **COMMON AREAS**.

The following is hereby added as a new Section 7.19 to the Franchise Agreement:

- "7.19 Common Areas.

If the Non-Traditional Restaurant shares a common customer seating, storage area, and/or freezer with any other business operated on the Premises, Franchisee will maintain the common customer seating, storage area, and/or freezer in accordance with the applicable provisions of the Brand Standards Manual.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 14

Am I required to obtain a liquor license to operate my Hck Hot Chicken Restaurant?

Accepted Answer

You will need to obtain a liquor license for the operation of the Restaurant if you request the ability to serve beer and wine on premises, and we approve your request. You need to be familiar with the procedures, difficulty and cost associated with obtaining a license to sell liquor, the restrictions placed on the manner in which liquor may be sold, and the potential liability imposed by dram shop laws involving injuries, directly and indirectly, related to the sale of liquor and its consumption.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENT, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 15

Must an Hck Hot Chicken Area Developer and their Affiliates fully perform all obligations under all agreements with the Franchisor to qualify for additional development?

Accepted Answer

- 6.3.1 Area Developer (and each of its Affiliates which have developed or operate Restaurants in the Development Area) shall have fully performed all of its obligations under this Development Agreement and all Franchise Agreements and other written agreements between Franchisor and Area Developer (or any such Affiliate of Area Developer), and must not at any time following Area Developer's submission of its Site Review Request, and until Franchisor grants its acceptance of the proposed site, be in default of any of its contractual or other legal obligationsto Franchisor or any of its Affiliates, or any approved vendor or supplier, or to any federal, state, county or municipal agency.

- 6.3.2 Area Developer shall have demonstrated to Franchisor, in Franchisor's discretion, Area Developer's financial and other capacity to perform the obligations set forth in the proposed new Franchise Agreement, including Area Developer's submission of a comprehensive management plan acceptable to, and accepted by Franchisor, which shall include among other reasonable requirements as may be established by Franchisor, an organization chart and supervisory requirements for the proposed Restaurant.

In determining if Area Developer is financially or otherwise capable, Franchisor shall apply the same criteria to Area Developer as it applies to prospective area developers at that time.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 16

When can an Hck Hot Chicken Area Developer begin employing a Multi-Unit Supervisor?

Accepted Answer

- 13.2.3 Area Developer has the option, commencing on the date which Area Developer, directly or indirectly through one or more Affiliate(s), opens its second Restaurant within the Development Area, to employ and retain, or shall cause the Entity to which each Franchise Agreement is assigned in accordance with Section 7.1 hereof to employ and retain, one or more individuals (each a "Multi-Unit Supervisor") vested with the authority and responsibility for the day-to-day supervision of two or more of the Restaurants owned or operated, directly or indirectly, by Area Developer within the Development Area.

The Multi-Unit Supervisor shall, during the entire period he/she serves as such, unless otherwise agreed in writing by Franchisor devote one hundred percent (100%) of his/her time and best efforts solely to operation of two or more of the Restaurants owned or operated, directly or indirectly, by Area Developer in the Development Area and to no other business activities.

Multi-Unit Supervisors, if any, shall report to the Director of Operations.

- 13.2.4 Area Developer shall notify Franchisor in writing at least ten days prior to employing the Director of Operations and Multi-Unit Supervisor, if any, setting forth in reasonable detail all information reasonably requested by Franchisor.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 17

What must the Area Developer demonstrate to Hck Hot Chicken regarding their ability to perform obligations under the new Franchise Agreement?

Accepted Answer

- 6.3.2 Area Developer shall have demonstrated to Franchisor, in Franchisor's discretion, Area Developer's financial and other capacity to perform the obligations set forth in the proposed new Franchise Agreement, including Area Developer's submission of a comprehensive management plan acceptable to, and accepted by Franchisor, which shall include among other reasonable requirements as may be established by Franchisor, an organization chart and supervisory requirements for the proposed Restaurant.

In determining if Area Developer is financially or otherwise capable, Franchisor shall apply the same criteria to Area Developer as it applies to prospective area developers at that time.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 18

When can an Area Developer execute a lease or purchase agreement for a Hck Hot Chicken Restaurant?

Accepted Answer

- 6.2.5 Area Developer shall not execute any lease or purchase agreement for any Restaurant, unless and until Franchisor has accepted the proposed site and Franchisor has delivered to Area Developer a fully executed Franchise Agreement counter-signed by Franchisor pursuant to Section 6.2.4.

After Franchisor's acceptance of the site and (sub)lease, if leased or subleased, and its delivery to Area Developer of the fully executed Franchise Agreement, Area Developer shall then procure the site, pursuant to the (sub)lease which has been reviewed and accepted by Franchisor, if (sub)leased, and shall forward to Franchisor, within ten days after its execution, one copy of the executed lease or, if purchased, the deed evidencing Area Developer's right to occupy the site.

Area Developer shall then commence construction and operation of the Restaurant pursuant to the terms of the applicable Franchise Agreement.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 19

What must the Area Developer have fully performed to develop a Hck Hot Chicken Restaurant?

Accepted Answer

- 6.3.1 Area Developer (and each of its Affiliates which have developed or operate Restaurants in the Development Area) shall have fully performed all of its obligations under this Development Agreement and all Franchise Agreements and other written agreements between Franchisor and Area Developer (or any such Affiliate of Area Developer), and must not at any time following Area Developer's submission of its Site Review Request, and until Franchisor grants its acceptance of the proposed site, be in default of any of its contractual or other legal obligationsto Franchisor or any of its Affiliates, or any approved vendor or supplier, or to any federal, state, county or municipal agency.

- 6.3.2 Area Developer shall have demonstrated to Franchisor, in Franchisor's discretion, Area Developer's financial and other capacity to perform the obligations set forth in the proposed new Franchise Agreement, including Area Developer's submission of a comprehensive management plan acceptable to, and accepted by Franchisor, which shall include among other reasonable requirements as may be established by Franchisor, an organization chart and supervisory requirements for the proposed Restaurant.

In determining if Area Developer is financially or otherwise capable, Franchisor shall apply the same criteria to Area Developer as it applies to prospective area developers at that time.

![](_page_165_Picture_0.jpeg)

- 6.3.3 Area Developer shall continue to operate, in the Development Area, not less than the cumulative number of Restaurants required by the Development Obligation set forth in Exhibit B to be in operation as of the end of the immediately preceding Development Period.
- 6.3.4 Area Developer, and each of its Affiliates who then has a currently effective Franchise Agreement or area development agreement with Franchisor, must sign a general release of any claims they may have against Franchisor and its Affiliates, on a form prescribed by Franchisor.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 20

When is an Hck Hot Chicken Area Developer required to employ a Director of Operations?

Accepted Answer

and other ongoing matters concerning this Development Agreement and the Restaurants developed pursuant hereto. The Operating Principal shall have the full authority to act on behalf of Area Developer in regard to performing, administering, or amending this Development Agreement and all Franchise Agreements executed pursuant hereto. Franchisor may, but is not required to, deal exclusively with the Operating Principal in such regards unless and until Franchisor's actual receipt of written notice from Area Developer of the appointment of a successor Operating Principal, who shall have been accepted by Franchisor.
- 13.2.2 Commencing on the date which Area Developer, directly or indirectly through one or more Affiliate(s), opens its second Restaurant within the Development Area, and at all times throughout the Term and the term of each Franchise Agreement executed pursuant hereto after such date, Area Developer shall employ and retain, or shall cause the Entity to which each Franchise Agreement is assigned in accordance with Section 7.1 hereof to employ and retain, an individual (the "Director of Operations") who shall be vested with the authority and responsibility for the day-to-day operations of all Restaurants owned or operated, directly or indirectly, by Area Developer within the Development Area. The Director of Operations shall, during the entire period he/she serves as such, unless otherwise agreed in writing by Franchisor devote

![](_page_175_Picture_0.jpeg)

one hundred percent (100%) of his/her time and best efforts solely to operation of all Restaurants owned or operated, directly or indirectly, by Area Developer in the Development Area and to no other business activities. The Director of Operations may, with the prior written consent of Franchisor, may be the same individual as the Operating Principal. The Director of Operations shall be responsible for all actions necessary to ensure that all Restaurants owned or operated, directly or indirectly, by Area Developer in the Development Area are operated in compliance with this Development Agreement, all Franchise Agreements therefor and the HCK Hot Chicken Brand Standards Manual.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 21

Besides the additional training fee, what other fees must a Hck Hot Chicken franchisee pay if they don't employ a TM upon opening their fourth restaurant?

Accepted Answer

ant Manager(s) and assistant Restaurant Manager(s). The Training Manager may only conduct the Initial Training Program at a training facility owned by Franchisee (or an Affiliate of Franchisee). If Franchisee (and/or its Affiliates), collectively, owns three or more Restaurants, Franchisee must at all times employ a TM; otherwise, upon the opening of its fourth (or higher) Restaurant, Franchisee must pay Franchisor: (i) a non-refundable additional training fee of \$5,000 prior to the s

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 22

Besides the deadline, what other condition must be met before the Area Developer can execute the Franchise Agreement for Hck Hot Chicken?

Accepted Answer

- 6.2.4 Within 30 days after Area Developer's receipt of the Franchise Disclosure Document and the thencurrent Franchise Agreement, but no sooner than immediately after any applicable waiting periods prescribed by Applicable Law have passed, Area Developer shall execute the Franchise Agreement described in the Franchise Disclosure Document and pay Franchisor the applicable Initial Franchise Fee.

- 6.2.5 Area Developer shall not execute any lease or purchase agreement for any Restaurant, unless and until Franchisor has accepted the proposed site and Franchisor has delivered to Area Developer a fully executed Franchise Agreement counter-signed by Franchisor pursuant to Section 6.2.4.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 23

Will the boundaries of an Hck Hot Chicken territory change if the population increases or decreases?

Accepted Answer

Except as otherwise provided in and during the term of the Franchise Agreement, for so long as you comply with the terms and conditions of the Franchise Agreement, we will not establish and operate, nor license any party other than you to establish and operate, any Restaurant under the System and the Marks within your Territory. Your territory is not dependent upon meeting a certain sales quota or the opening of additional Restaurants. The boundaries of your Territory will not change, even if the population within your Territory increases or decreases, during the initial term of your Franchise Agreement.

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

Source: Item 12 — TERRITORY (FDD pages 37–40)

Question 24

For business interruption insurance, does Hck Hot Chicken specify the amount of coverage in the Brand Standards Manual?

Accepted Answer

sales and product mix information.

#### **Insurance**

You must purchase the insurance coverage that we require for your HCK Hot Chicken Franchise. You currently must have the following insurance coverage: (1) commercial general liability insurance with limits of at least \$1 million per occurrence, at least \$2 million aggregate, and at least \$1 million per person, with \$5,000 per person medical benefits, and a maximum deductible of \$5,000; (2) all risks coverage insurance on all furniture, fixtures, equipment, inventory, supplies and other property used in the operation of the HCK Hot Chicken Franchise (including flood and/or earthquake coverage where there are known risks) for full replacement value; (3) business interruption insurance to cover 12 months of Franchisee's loss of revenue and ongoing expenses and to cover any amounts owing to the Franchisor under the Franchise Agreement (including, in the case of a casualty loss, the Continuing Royalty, Brand Fund Contributions, and other fees and payments the Franchisor would have received had the casualty loss not occurred) or any other agreement between the Franchisee and the Franchisor or its Affiliates, in the amount specified by the Franchisor in the Brand Standards Manual or otherwise in writing for a minimum period of time as designated by the Franchisor; and (4) workers' compensation insurance consistent with applicable law. The insurance policies must be purchased from a supplier rated A+ or better by A.M. Best & Company, Inc., or

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)

Question 25

Does Hck Hot Chicken charge a fee for training a replacement Operating Principal and/or Director of Operations?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING]

In addition to the Initial Training Program, your Operating Principal, and your Director of Operations (defined in Item 15) must attend, and satisfactorily complete, an extra practice week and online training at least 60 days before your Restaurant opens for business. The initial training program for an Operating Principal and a Director of Operations is provided in the table below. If an Operating Principal and/or Director of Operations is replaced, we will charge you a fee for training.

We plan to provide the training listed in the table below:

## Operating Principal and Director of Operations Training

---

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING]

Before opening your Restaurant to the public, we will provide our initial training program ("Initial Training Program") for up to three management persons, including your Operating Principal (if you are an entity) and one Director of Operations. Some or all of the Initial Training Program may be delivered virtually by webinars, learning management systems, training videos or other digital media. The Initial Training Program is provided by us at no charge, so long as all persons attend the Initial Training Program at the same time. Training must be completed to our satisfaction and your management team must be certified by us at least 60 days before you open for business. The operating principal and director of operations training program is provided in the table following the Initial Training Program table. You must pay our then-current fee (currently $1,000) for training each additional person. You will not receive any compensation or reimbursement for services or expenses for participation in the initial training program. You are responsible for all your expenses to attend any training program, including lodging, transportation, food, uniforms, and training materials.

We plan t

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING]

Additional training or assistance, including refresher training courses, currently cost between $500 and $1,000 per attendee, per week. If you appoint a new manager, that person must attend and successfully complete our initial training program before assuming responsibility for the management of your HCK Hot Chicken Restaurant. You must pay our then-current fee for training replacement personnel (Item 6 has more information on this fee). If we conduct an inspection of your Restaurant and determine you are not operating in compliance with the Franchise Agreement, we may require that you attend remedial training that addresses your operational deficiencies. You may also request that we provide additional training (either at our corporate location or at your Restaurant) and you may be required to pay additional fees for this training.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING (FDD pages 28–37)

Question 26

Is the choice of law for Hck Hot Chicken subject to applicable state law?

Accepted Answer

| Provision | Agreement | Summary |
|---|---|---|
|  |  |  |
| v. Choice of forum | Sections 18.2 and 19.14 | Except for certain claims and subject to state law, you and we agree |
|  |  | that the principal city closest to our principal place of business |
|  |  | (currently Sarasota, FL) will be the venue for any arbitration under |
|  |  | the Franchise Agreement, and you and we both waive the right to |
|  |  | a trial by jury. Subject to applicable state law, arbitration and |
|  |  | litigation must be in the principal city closest to our principal place |
|  |  | of business (currently Sarasota, FL). |
| w. Choice of law | Section 19.7 | The laws of the state of Florida, subject to applicable state law. |

Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–51)

Question 27

What is the condition for an Area Developer to sell assets used in any of the Restaurants developed under the Hck Hot Chicken Development Agreement if the Franchisor elects the execution by the assignee of new Franchise Agreements?

Accepted Answer

Except as provided in Section 7.2.2, Area Developer acknowledges and agrees that it will not be permitted to make an Assignment of this Development Agreement or sell, gift, convey, assign or transfer the assets used in any of the Restaurants developed hereunder or any Franchise Agreement executed pursuant to this Development Agreement except in conjunction with a concurrent Assignment to the same approved assignee of all of the assets used in all of said Restaurants, and all of the Franchise

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Agreements executed pursuant to this Development Agreement or at Franchisor's election the execution by the assignee of new Franchise Agreements on Franchisor's Then-current form for each of the Restaurants then developed or under development by Area Developer, and otherwise in accordance with the terms and conditions of Area Developer's Franchise Agreement(s).

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 28

What is the condition precedent to the Franchisee's right to operate a Hck Hot Chicken Non-Traditional Restaurant within a Host Facility?

Accepted Answer

If the placement and operation of the Non- Traditional Restaurant in or in connection with the Host Facility requires the consent of the owner, franchisor, and/or licensor of the Host Facility, Franchisee agrees to obtain such consent in writing (and provide a copy thereof to Franchisor), and Franchisee acknowledges and agrees that such consent is a condition precedent to the grant of Franchisee'sright to establish and operate the Non-Traditional Restaurant.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 29

What is a condition precedent to Hck Hot Chicken's obligations under Sections 6.1 and 6.2?

Accepted Answer

- 6.2.4 Within 30 days after Area Developer's receipt of the Franchise Disclosure Document and the thencurrent Franchise Agreement, but no sooner than immediately after any applicable waiting periods prescribed by Applicable Law have passed, Area Developer shall execute the Franchise Agreement described in the Franchise Disclosure Document and pay Franchisor the applicable Initial Franchise Fee.

- 6.2.5 Area Developer shall not execute any lease or purchase agreement for any Restaurant, unless and until Franchisor has accepted the proposed site and Franchisor has delivered to Area Developer a fully executed Franchise Agreement counter-signed by Franchisor pursuant to Section 6.2.4.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 30

What is the condition regarding the Franchisor offering franchises in the same state for a Hck Hot Chicken franchisee to exercise the Successor Franchise Right?

Accepted Answer

- 3.5 Conditions Precedent to Entering into a Successor Franchise Agreement.

Franchisee's Successor Franchise Right is conditioned upon Franchisee's fulfillment of each and all of the following conditions precedent:

- 3.5.1 At the time Franchisee delivers its Notice of Election to Franchisor and at all times thereafter until the commencement of the applicable Successor Term, Franchisee shall have fully performed, in all material respects, all of its obligations under the Agreement, the HCK Hot Chicken Brand Standards Manual and all other agreements then in effect between Franchisee and Franchisor (or itsAffiliates).

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 31

What condition is required for the assignment of the Hck Hot Chicken franchise from the Former Franchisee to the New Franchisee?

Accepted Answer

WHEREAS, Former Franchisee desiresto assign ("Requested Assignment") the Franchised Business to New Franchisee, New Franchisee desires to accept the Requested Assignment of the Franchised Business from Former Franchisee, and Franchisor desires to approve the Requested Assignment of the Franchised Business from Former Franchisee to New Franchisee upon the terms and conditions contained in this Agreement, including that New Franchisee sign Franchisor's current form of franchise agreement together with all exhibits and attachments thereto ("New Franchise Agreement"), contemporaneously herewith.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 32

What conditions must be met for a general release to be valid in a Hck Hot Chicken franchise agreement in Washington?

Accepted Answer

- 6. The above Release shall not apply to any liabilities arising under the California Franchise Investment Law, the California Franchise Relations Act, Indiana Code § 23-2-2.5.1 through 23-2-2.7-7, the Maryland Franchise Registration and Disclosure Law, Michigan Franchise Investment Law, Minnesota Franchise Act, North Dakota franchise laws, the Rhode Island Investment Act, and the Washington Franchise Investment Protection Act and the rules adopted thereunder.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 33

What conditions related to existing agreements must Hck Hot Chicken franchisees meet to be considered for additional development?

Accepted Answer

|                                                           | B. AREA DEVELOPMENT AGREEMENT            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |  |  |
|-----------------------------------------------------------|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|
| Provision | Section in Area Development Agreement | Summary |  |  |  |
| a. Length of the Franchise Term | Section 4.1 | Varies based upon the number of Restaurants we grant you the right to open. Typically, five years or until you sign a Franchise Agreement for your last Restaurant necessary to satisfy your Development Obligation, whichever is earlier. |  |  |  |
| b. Renewal or extension ofthe term | Sections 2.4, 4.2, 4.3, 4.4 and 4.5 | You do not have the right to renew your Area Development Agreement. However, if we determine that further development of your Development Area is desirable, if you are in good standing and you are not in default under your Area Development Agreement, we will offer you the opportunity to develop additional Restaurants. Unless we consent, you may not open more than the total number of Restaurants comprising your Development Obligation. |

Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–51)

Question 34

For Hck Hot Chicken, what is the consequence if the Franchisee fails to perform their obligations under the lease?

Accepted Answer

In addition to all other remedies herein granted if Franchisee shall default in the performance of any of its obligations or breach any term or condition of this Agreement or any related agreement, Franchisor may, at its election, immediately or at any time thereafter, without waiving any claim for default or breach hereunder and without notice to Franchisee, cure such default or breach for the account and on behalf of Franchisee, and the cost to Franchisor thereof shall be due and payable on demand and shall be deemed to be additional compensation due to Franchisor hereunder and shall be added to the amount of compensation next accruing hereunder, at the election of Franchisor.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 35

What is the consequence if an Hck Hot Chicken franchisee fails to provide additional information requested by the franchisor concerning persons with a financial interest in the franchisee?

Accepted Answer

If any audit or other investigation reveals an

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under-reporting or under-recording error, then upon demand Franchisee shall pay the amount determined to be owed, plus interest at the daily equivalent of twelve percent (12%) per year simple interest, not to exceed the highest rate permitted by Applicable Law. In addition, if any such audit or other investigation reveals an under-reporting or under-recording error of two percent (2%) or more or if Franchisee fails to submit any reports when due, then in addition to any other sums due and in addition to any other rights and remedies it may have, including the right to terminate this Agreement as provided in Section 14, the expenses of the audit/inspection shall be borne and paid by Franchisee upon billing by Franchisor, which shall include Franchisor's Travel Expenses and Wages and reasonable accounting and legal expense. Without limiting the foregoing, if such audit or other investigation reveals an under-reporting or under-recording error of five percent (5%) percent or more, Franchisor, in addition to any other rights and remedies it may have, including the right to terminate this Agreement as provided in Section 14, may require Franchisee to maintain and deliver to Franchisor from time to time, financial statements audited by an independent certified public accountant.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 36

What are the consequences of failing to submit a required report for a Hck Hot Chicken franchise?

Accepted Answer

| Type of Fee (Note 1)                                          | Amount                                                                                     | Due Date                                                                                                                                                  | Remarks                                                                                                                                                                                                                                                                                                                                                                      |
|---------------------------------------------------------------------|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Failure to Submit Required Report Fee | $100 per occurrence and $100 per week | Your bank account will be debited for failure to submit any requested report within five days of request | Payable if you fail to submit any required report or financial statement when due. Fines collected are paid to the Brand Fund. You will continue to incur this fee until you submit the required report. |
| Audit Expenses                        | Cost of audit and inspection, any understated amounts, plus Interest, and any related accounting and legal expenses | On demand                                                                                                                                                     | You will be required to pay this if an audit reveals that you understated your weekly Gross Sales by more than 2% or you fail to submit required reports.                                                                                                                                                              |

Source: Item 6 — OTHER FEES (FDD pages 13–19)

Question 37

Does the deletion of provisions relating to waiving rights to procedures, forums, or remedies under Minnesota law affect the obligation in the Hck Hot Chicken Franchise Agreement relating to arbitration?

Accepted Answer

Minn. Rule Part 2860.4400J prohibits a franchisee from waiving his rights to a jury trial or waiving his rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction, or consenting to liquidated damages, termination penalties or judgment notes. Any provision in the Franchise Agreement which would require you to waive your rights to any procedure, forum or remedies provided for by the laws of the State of Minnesota is deleted from any agreement relating to Franchises offered and sold in the State of Minnesota; provided, however, that this paragraph will not affect the obligation in the Franchise Agreement relating to arbitration.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 38

What is the dependency for paying the renewal fee for an Hck Hot Chicken franchise?

Accepted Answer

|  | Amount | Due Date | Remarks |
|---|---|---|---|
| (Note 1) |  |  | not completed. You will also be required to pay any professional fees that we incur for certain transfers as discussed in this Item 6. |
| Indemnification | Will vary under circumstances | As incurred | You must indemnify and reimburse us for any expenses or losses, including professional fees that we or our representatives incur related in any way to your HCK Hot Chicken Restaurant or Franchise. |
| Renewal Fee | The greater of 50% of | At the time you | Payable if you qualify to renew your |
|  | our then-current initial | sign the new | Franchise Agreement and choose to enter |
|  | franchise fee, or $20,000 | franchise agreement | into a successor franchise agreement. |

Source: Item 6 — OTHER FEES (FDD pages 13–19)

Question 39

Will the Development Fee paid to Hck Hot Chicken be credited towards the initial Franchise Fee for each restaurant developed under the Area Development Agreement?

Accepted Answer

1. Development Fee. Upon signing the Area Development Agreement and Franchise Agreement for your first Restaurant, you must pay us a Development Fee. All fees and payments are non-refundable, unless otherwise stated or permitted by the payee. The Development Fee varies based on the number of Restaurants you commit to develop. The low estimate is based on a commitment to develop three (3) Restaurants and the

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high estimate is based on a commitment to develop ten (10) Restaurants. We may permit you to enter into a Development Agreement to develop more than ten (10) Restaurants if we determine that you are operationally and financially capable of doing so. The Development Fee is due upon execution of your Development Agreement and is not refundable. The Development Fee will be credited towards the initial Franchise Fee for each Restaurant developed under the Development Agreement and you must pay us the balance of the Initial Franchise Fee upon signing a Franchise Agreement for each additional Restaurant in your Development Schedule. See Item 5.

- 2. Estimated Initial Investment for First Restaurant. For each Restaurant that you develop under a Development Agreement, you will execute a Franchise Agreement and incur the initial investment expenses for the development of a single Restaurant as described in the first table of this Item 7. This estimate is based on the expenses described in the first table of this Item 7. The estimate does not include the Initial Franchise Fee or Development Fee for your first Restaurant we grant you the right to develop under your Area Development Agreement.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–23)

Question 40

Can Hck Hot Chicken establish blackout dates during which it is not obligated to provide training?

Accepted Answer

All certification and training is subject to Franchisor's capacity and scheduling requirements.

- 6.7 Notice.

If Franchisee believes Franchisor has failed to adequately provide any training or other preopening or opening services to Franchisee as provided in this Agreement, Franchisee will notify Franchisor in writing within 30 days following Franchisor's provision of such training or services.

Without timely provision of such notice to Franchisor, Franchisee will be deemed to conclusively acknowledge that all training and pre-opening and opening services required to be provided to Franchisee were sufficient and satisfactory in Franchisee's judgment.

- 6.4.3 In the event of any sale, transfer, or Assignment, the transferee/assignee must be trained by Franchisor as a condition of Franchisor's consent to such transfer.

The Franchised Restaurant shall not be transferred, opened, or re-opened by the transferee until Franchisor accepts the transferee in writing as being qualified to operate the Restaurant and Franchisor has otherwise consented to the transfer in accordance with this Agreement.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 41

In the event of arbitration for a Hck Hot Chicken franchise dispute, what happens to unresolved issues if the parties cannot fully resolve and settle through mediation?

Accepted Answer

- 18.2 Arbitration.

If the parties cannot fully resolve and settle a dispute through mediation as set forth in Section 18.1, all unresolved issues involved in the dispute, including any controversy or claim between Franchisor and Franchisee arising out of or relating to this Agreement or any alleged breach hereof, and any issues pertaining to the arbitrability of such controversy or claim and any claim that this Agreement or any part hereof is invalid, illegal, or otherwise voidable or void, shall be submitted to binding arbitration.

Said arbitration shall be conducted before and will be heard by three arbitrators in accordance with the then-current Rules of Practice and Procedure of JAMS.

If JAMS or any successor thereto, is no longer in existence at the time arbitration is commenced, Franchisor and Franchisee will agree on another arbitration organization to conduct the arbitration proceeding.

Judgment upon any award rendered may be entered in any Court having jurisdiction thereof.

Except to the extent prohibited by Applicable Law, the proceedings shall be held in the location closest to Franchisor's principal place of business (currently Sarasota, FL).

All arbitration proceedings and claims shall be filed and prosecuted separately and individually in the name of Franchisee and Franchisor, and not in any class action or representative capacity, and shall not be joined with or consolidated with claims asserted by or against any other franchisee.

The arbitrators shall have no power or authority to grant punitive or exemplary damages as part of its award.

In no event may the material provisions of this Agreement including, but not limited to the method of operation, authorized product line sold or monetary obligations specified in this Agreement, amendments to this Agreement or in the HCK Hot Chicken Brand Standards Manual be modified or changed by the arbitrator at any arbitration hearing.

The arbitration and the parties' agreement therefor shall be deemed to be self-executing, and if either party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such party despite said failure to appear.

All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained herein shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.), notwithstanding any provision of this Agreement specifying the state law under which this Agreement shall be governed and construed.

Except as required by Applicable Law, including the required disclosure in Franchisor's franchise disclosure document, the entire arbitration proceedings and related documents are confidential.

These matters will not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the parties, and will not be disclosed to anyone who is not an agent, employee, expert witness, or representative for any of the parties; however, evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the arbitration.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 42

What factors can affect the insurance premium costs for an Hck Hot Chicken franchise?

Accepted Answer

- 15. Insurance. This estimate is for your insurance premium deposit and your first three months of insurance coverage, which may be paid prior to opening. You will need to check with your insurance carrier for actual premium quotes and costs, as well as for the actual amount of the deposit. The cost of coverage will vary based upon the area in which your business will be located, your experience with the insurance carrier, the loss experience of the carrier, the amount of the deductibles and of coverage, and other factors beyond our control. You should also check with your insurance agent or broker regarding any additional insurance that you may wish to carry above our required minimums.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–23)

Question 43

What fee must a Hck Hot Chicken franchisee pay if they do not employ a Training Manager upon opening their fourth restaurant?

Accepted Answer

ant Manager(s) and assistant Restaurant Manager(s). The Training Manager may only conduct the Initial Training Program at a training facility owned by Franchisee (or an Affiliate of Franchisee). If Franchisee (and/or its Affiliates), collectively, owns three or more Restaurants, Franchisee must at all times employ a TM; otherwise, upon the opening of its fourth (or higher) Restaurant, Franchisee must pay Franchisor: (i) a non-refundable additional training fee of \$5,000 prior to the s

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 44

What financial ability must an Hck Hot Chicken area developer demonstrate to be considered for additional development?

Accepted Answer

|                                                           | B. AREA DEVELOPMENT AGREEMENT            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |  |  |
|-----------------------------------------------------------|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|
| Provision | Section in Area Development Agreement | Summary |  |  |  |
| a. Length of the Franchise Term | Section 4.1 | Varies based upon the number of Restaurants we grant you the right to open. Typically, five years or until you sign a Franchise Agreement for your last Restaurant necessary to satisfy your Development Obligation, whichever is earlier. |  |  |  |
| b. Renewal or extension ofthe term | Sections 2.4, 4.2, 4.3, 4.4 and 4.5 | You do not have the right to renew your Area Development Agreement. However, if we determine that further development of your Development Area is desirable, if you are in good standing and you are not in default under your Area Development Agreement, we will offer you the opportunity to develop additional Restaurants. Unless we consent, you may not open more than the total number of Restaurants comprising your Development Obligation. |  |  |  |
| c. Requirements for you torenew or extend | Sections 4.3 and 4.4 | We use the term "renewal" to refer to extending our franchise relationship at the end of your initial term. You do not have the right to renew your Area Development Agreement. However, if we determine that further development of your Development Area is desirable, if you are in good standing and you are not in default under your Area Development Agreement, we will offer you the opportunity to develop additional Restaurants. Unless we choose, in our sole discretion, to amend your current Area Development Agreement to extend the term, you must sign a new area development agreement on our then-current form, which will contain your additional development obligation, and which may contain materially different terms and conditions from the original area development agreement. You and your affiliates who have a currently existing Franchise Agreement or Area Development Agreement with us must not be in default; demonstrated financial ability to perform additional development; performed current development obligations; meet then-current area developer qualifications; and sign a general release. |

Source: Item 17 — RENEWAL, TERMINATIONS, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–51)

Question 45

Is the Former Franchisee required to execute a General Release Agreement when transferring a Hck Hot Chicken franchise?

Accepted Answer

ormer Franchisee to New Franchisee upon receipt of the Franchisor's Assignment Fee from Former Franchisee and the mutual execution of this Agreement by all parties. Franchisor waives its right of first refusal set forth in the Former Franchise Agreement and waives any obligation for Former Franchisee to enterinto a subordination agreement pursuant to the Former Franchise Agreement.
- 4. Termination of Rights to the Franchised Business. The parties acknowledge and agree that effective upon the date of this Agreement, the Former Franchise Agreement shall terminate and all of Former Franchisee'srightsto operate the Franchised Business are terminated and that from the date of this Agreement only New Franchisee shall have the sole right to operate the Franchised Business under the New Franchise Agreement.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 46

Does the Hck Hot Chicken Franchise Agreement have to be entered into pursuant to an Area Development Agreement?

Accepted Answer

- 4.1 Initial Franchise Fee. Unless Franchisee is signing this Agreement pursuant to a HCK Hot Chicken area development agreement, in which case the payment schedule would be determined by the provisions of such area development agreement, upon execution hereof, Franchisee shall pay to Franchisor the Initial Franchise Fee set forth in Attachment A. The Initial Franchise Fee is non-refundable, in whole or in part, under any circumstances.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 47

For Hck Hot Chicken franchise renewal, what compliance requirements are necessary to continue franchise rights, specifically regarding supplier standards?

Accepted Answer

We do not provide material benefits to you based on your use of a particular supplier. However, when your franchise is up for renewal, to continue your franchise rights, we require you to be in compliance with your franchise agreement, which includes compliance with any supplier standards that are contained in our Operations Manual.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)

Question 48

What should an Hck Hot Chicken franchisee do if the approved software for submitting Gross Sales is not functioning?

Accepted Answer

In the event that the software is not functioning, or this feature is not available, Franchisee shall prepare and submit the required reports manually.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 49

What must a Hck Hot Chicken franchisee do if there is a conflict between Hck Hot Chicken's privacy standards and applicable law?

Accepted Answer

- 7.17 Privacy. Franchisee agrees to comply with all applicable laws pertaining to the privacy of customer, employee, and transactional information ("**Privacy Laws**"). Franchisee also agrees to comply with Franchisor's standards and policies pertaining to Privacy Laws. If there is a conflict between Franchisor's standards and policies pertaining to Privacy Laws and actual applicable law, Franchisee will: (a) comply with the requirements of applicable law; (b) immediately give Franchisor written notice of said conflict; and (c) promptly and fully cooperate with Franchisor and Franchisor's counsel in determining the most effective way, if any, to meet Franchisor's standards and policies pertaining to Privacy Laws within the bounds of applicable law. Franchisee agrees not to publish, disseminate, implement, revise, or rescind a data privacy policy without Franchisor's prior written consent as to said policy.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 50

Does the Hck Hot Chicken franchisee have to promptly implement any designated design elements or changes to their website?

Accepted Answer

Franchisor may permit Franchisee to periodically select from Franchisor's designated alternative design elements for an interior page (or portion thereof) dedicated to the Franchised Restaurant.

Such designated alternative design elements may change from time to time.

Franchisor will implement any such designated design elements or changes promptly, subject to Franchisor's business needs and scheduling availability.

Franchisor may disable or terminate such website(s), in whole or in part, without Franchisor having any liability to Franchisee.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 51

What is the Franchisee required to do if the placement of the Hck Hot Chicken Non-Traditional Restaurant requires consent?

Accepted Answer

If the placement and operation of the Non- Traditional Restaurant in or in connection with the Host Facility requires the consent of the owner, franchisor, and/or licensor of the Host Facility, Franchisee agrees to obtain such consent in writing (and provide a copy thereof to Franchisor), and Franchisee acknowledges and agrees that such consent is a condition precedent to the grant of Franchisee'sright to establish and operate the Non-Traditional Restaurant.

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 52

Is a Hck Hot Chicken franchisee required to purchase and use devices to gather customer information and comments?

Accepted Answer

other information, with or without remuneration, to any third party. Franchisee shall respond promptly to each customer inquiry or complaint and resolve all reasonable complaints to the customer's satisfaction.
- 9.5.2 At Franchisor's request, Franchisee shall purchase, use and display in the Restaurant during all operating hours, any required, as specified in the Brand Standards Manual, physical or electronic devices or systems to gather customer information and comments regarding their experience at the Restaurant, or HCK Hot Chicken Restaurants in general.

# **SECTION 10. REPORTS, BOOKS AND RECORDS, INSPECTIONS**

10.1 General Reporting.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 53

Does the Hck Hot Chicken franchisee have to use the design elements for their interior page that the franchisor designates?

Accepted Answer

11.1 Use of Marks. Subject to Section 11.6 of this Agreement, the Franchised Restaurant shall be named "HCK Hot Chicken" with only such additional prefix or suffix as may be required by Franchisor from time to time. Franchisee shall use and display such of Franchisor's trade dress, Marks, and such signs, advertising, and slogans only as Franchisor may from time to time prescribe or approve. Upon expiration or sooner termination of this Agreement, Franchisor may, if Franchisee does not do so, execute in Franchisee's name and on Franchisee's behalf, any and all documents necessary in Franchisor's judgment to end and cause the discontinuance of Franchisee's use of the trade dress and Marks and Franchisor is hereby irrevocably appointed and designated as Franchisee's attorney-in-fact so to do.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 54

Can a Hck Hot Chicken franchisee waive the right to seek exemplary or punitive damages in Washington?

Accepted Answer

- 10. **Waiver of Exemplary & Punitive Damages**.

RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.

Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 55

Must the Hck Hot Chicken franchisee's construction documents be reviewed by a designated architect?

Accepted Answer

- 5.4.2 Franchisee must retain one of Franchisor's designated architects to create Franchisee's preliminary floorplan, at Franchisee's sole expense.

Franchisee may choose to retain one of Franchisor's designated architects or another architect Franchisor approves, to prepare Franchisee's construction documents.

Upon completion of Franchisee's construction documents, if Franchisee has chosen not to use Franchisor's designated architects, Franchisor will require Franchisee to employ Franchisor's designated architect to review and approve the construction documents, at Franchisee's expense.

Franchisor's designer will review the construction documents and provide input on the placement of trade dress elements, general restaurant layout and other input as appropriate.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 56

When the Hck Hot Chicken franchisor begins manufacturing goods, products, or supplies, must franchisees purchase them from the franchisor or its affiliates?

Accepted Answer

- 9.3.1 When and if Franchisor begins to manufacture and/or distribute goods, products or supplies, all goods, products, and supplies purchased from Franchisor or its Affiliates shall be purchased in accordance with the purchase order format issued from time to time by Franchisor (or the applicable Affiliate), the current form of which shall be set forth in the HCK Hot Chicken Brand Standards Manual, and in accordance with the policies set forth in the HCK Hot Chicken Brand Standards Manual, if any.

Franchisor (or such Affiliate) may change the prices, delivery terms and other terms relating to its sale of goods, services, products, and supplies ("**Goods and Services**") to Franchisee on prior written notice, provided, that such prices shall be the same as the prices charged to similarly situated Franchisees (excluding shipping, transportation, warehousing, insurance and related costs and expenses).

Such prices shall be Franchisor's (or the Affiliate's) then-current prices, which may change from time to time.

Franchisee further acknowledges that prices the Franchisor (or the applicable Affiliate) charges to Franchisee may include a profit to Franchisor and may be higher than Franchisor's (or its Affiliate's) internal prices allocated or charged to Franchisor or Affiliate-owned Restaurant.

Presently, Franchisor (or its Affiliate) expects to receive a mark-up based on its or their cost of goods sold.

Franchisor (or the applicable Affiliate) in its discretion, may discontinue the sale of any Goods or Services at any time if in Franchisor's (or the applicable Affiliate) judgment its continued sale becomes unfeasible, unprofitable, or otherwise undesirable.

Franchisor (or the applicable Affiliate) shall not be liable to Franchisee for unavailability of, or delay in shipment or receipt of, merchandise because of temporary product shortages, order backlogs, production difficulties, delays, unavailability of transportation, fire, strikes, work stoppages, or other causes beyond the reasonable control of Franchisor (or the applicable Affiliate).

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 57

Can the Franchisor disapprove of a previously accepted Operating Principal for a Hck Hot Chicken franchise?

Accepted Answer

If during the Term the Operating Principal is not able to continue to serve in such capacity or no longer qualifies to act as such in accordance with this Section (including Franchisor's subsequent disapproval of such person), Franchisee shall promptly notify Franchisor of such occurrence. Thereafter, Franchisee shall promptly, but not later than 30 days after the prior Operating Principal ceases to serve Franchisee, designate a replacement operating principal who meets Franchisor's then-current qualification requirements, provide Franchisor with such information about such new Operating Principal as Franchisor may request, and cause such replacement Operating Principal to undergo, at Franchisee's cost, such training as Franchisor may require."

Source: Item 22 — CONTRACTS (FDD pages 54–55)

Question 58

Can the franchisor operate other businesses under different names that sell similar goods and services within an Hck Hot Chicken franchisee's territory?

Accepted Answer

We reserve all rights not expressly granted in the Franchise Agreement. For example, we may own, operate and authorize others to own or operate: (a) HCK Hot Chicken Restaurants at any location outside of your Territory; (b) HCK Hot Chicken Restaurants at Non-Traditional Venues at any location (without regard to the proximity to your Restaurant); and (c) restaurants or other businesses operating under names other than "HCK Hot Chicken," at any location, and of any type whatsoever, within or outside the Territory, without regard to the proximity to your Restaurant and which may sell goods and services similar to those under the "HCK Hot Chicken" brand. In addition, we reserve the right to acquire, or be acquired by any competing system, including a system that has one or more units in your Territory.

We may sell products under the "HCK Hot Chicken" trademark or any other trademarks, regardless of proximity to your Restaurant, through any method of distribution, including sales through such channels of distribution as grocery stores, supermarkets, convenience stores, the Internet, delivery, catering, catalog sales, telemarketing, or other direct marketing sales (together, "Alternative Distribution Channels") without compensation to you. Although we reserve the rights described, neither we nor any affiliate, operates, franchises or has plans to operate or franchise a business under a different trademark that sells or will sell goods or services similar to those offered by you or our other HCK Hot Chicken Franchises.

Source: Item 12 — TERRITORY (FDD pages 37–40)

Question 59

Is the Hck Hot Chicken Franchisor required to provide additional site visits, project management, design work and equipment purchasing services?

Accepted Answer

9.2.1 Franchisee may purchase authorized Non-Proprietary Products from: (i) Franchisor or its Affiliates (if they sell the same); (ii) Suppliers designated or approved in writing by Franchisor; or (iii) Suppliers selected by Franchisee and approved in writing by Franchisor prior to Franchisee making such purchase(s); provided, however, that if this is one of the first three Restaurants developed by Franchisee or its Affiliates, Franchisee must purchase certain Non-Proprietary Products that Franchisor designates only from Franchisor or Suppliers it designates, including new equipment for all items that impact food production and the guest experience, and large equipment and small wares.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Question 60

What happens if the Area Developer is in default of any obligations to Hck Hot Chicken or its affiliates after submitting a Site Review Request?

Accepted Answer

- 6.3.1 Area Developer (and each of its Affiliates which have developed or operate Restaurants in the Development Area) shall have fully performed all of its obligations under this Development Agreement and all Franchise Agreements and other written agreements between Franchisor and Area Developer (or any such Affiliate of Area Developer), and must not at any time following Area Developer's submission of its Site Review Request, and until Franchisor grants its acceptance of the proposed site, be in default of any of its contractual or other legal obligationsto Franchisor or any of its Affiliates, or any approved vendor or supplier, or to any federal, state, county or municipal agency.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 61

For Hck Hot Chicken, what happens if an Area Developer exercises their rights under Section 7.2.2?

Accepted Answer

- 7.2.3 In the event that Area Developer exercises its rights under Section 7.2.2 then, Area Developer and such Subsidiary shall, in addition to any other covenants contained in the applicable Franchise Agreement, affirmatively covenant to continue to satisfy each of the conditions set forth in Section 7.2.2 throughout the term of such Franchise Agreement.

Source: Item 23 — RECEIPTS (FDD pages 55–245)

Question 62

What happens if it becomes advisable for Hck Hot Chicken to modify or discontinue using any Mark?

Accepted Answer

If it becomes advisable, at any time, for us and/or you to modify or discontinue using any Mark and/or use one or more additional or substitute trademarks or service marks, you must comply with our directions within a reasonable time after receiving notice. We will not reimburse you for your direct expenses of changing signage, for any loss of revenue, or other indirect expenses due to any modified or discontinued Mark, or for your expenses of promoting a modified or substituted trademark or service mark.

Source: Item 13 — TRADEMARKS (FDD pages 40–41)

Question 63

What happens if a Hck Hot Chicken franchisee fails to meet the Local Advertising Requirement?

Accepted Answer

In addition to the Brand Fund Contributions, you must spend one percent (1%) of your annual Gross Sales on local advertising each year ("Local Advertising Requirement"). If you fail to spend the Local Advertising Requirement, you will be required to pay the difference to the Brand Fund.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING,COMPUTER SYSTEMS, AND TRAINING (FDD pages 28–37)

Question 64

What happens if an Hck Hot Chicken franchisee fails to provide the required notices in a timely fashion regarding their Successor Franchise Right?

Accepted Answer

- 3.4 If Franchisee fails to perform any of the acts, or deliver any of the notices required pursuant to the provisions of Sections 3.3 or 3.4 of the Agreement, in a timely fashion, such failure shall be deemed an election by Franchisee not to exercise its Successor Franchise Right and shall automatically cause Franchisee's said Successor Franchise Right to lapse and expire.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

Hck_Hot_Chicken 2025 FDD FAQ