When must the Area Developer pay Hck Hot Chicken the applicable Initial Franchise Fee?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the Area Developer must pay the applicable Initial Franchise Fee to Hck Hot Chicken within 30 days after receiving the Franchise Disclosure Document and the current Franchise Agreement. This payment is contingent upon any applicable waiting periods prescribed by law having passed.
Specifically, the Area Developer must execute the Franchise Agreement and pay the Initial Franchise Fee to Hck Hot Chicken within this 30-day window, but only after any legally required waiting periods have been observed. This means the Area Developer cannot rush into signing the agreement immediately after receiving the FDD if laws mandate a waiting period for review and consideration.
This condition ensures that Area Developers have adequate time to review the Franchise Disclosure Document and Franchise Agreement before committing to the franchise. It also aligns with regulatory requirements designed to protect prospective franchisees from undue pressure to sign agreements without proper consideration. The Initial Franchise Fee for each Franchise Agreement is $40,000, which is calculated as part of the Development Fee for the first Franchise Agreement.
Furthermore, the Area Developer cannot execute any lease or purchase agreement for a Restaurant site until Hck Hot Chicken has accepted the proposed site and delivered a fully executed Franchise Agreement. This sequence protects the Area Developer from investing in a location that Hck Hot Chicken does not approve. After site acceptance and delivery of the Franchise Agreement, the Area Developer must then secure the site and forward a copy of the executed lease or deed to Hck Hot Chicken within ten days.