For Hck Hot Chicken, what must an Area Developer do within each Development Period as specified in Exhibit B?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1.1 Within each Development Period specified in Exhibit B, Area Developer shall construct, equip, open, and thereafter continue to operate within the Development Area, not less than the cumulative number of Restaurants required by the Development Obligation for that Development Period.
- 2.1.2 All Restaurants developed hereunder which are open and operating and which have been assigned to Affiliates of Area Developer in accordance with Section 7.2.2 with Franchisor's consent, shall count in determining whether Area Developer has satisfied the Development Obligation for so long as the applicable Affiliate continues to satisfy the conditions set forth in Section 7.2.2.
- 2.2 Timing of Execution of Leases and Franchise Agreements. Notwithstanding anything to the contrary contained herein, on or before the date which is 180 days before the end of each Development Period, Area Developer shall have executed (in accordance with this Development Agreement) a lease (or purchase agreement) and Franchise Agreement and paid the required Initial Franchise Fee, for each Restaurant that is required to be constructed, equipped, opened, and thereafter operated by the end of such Development Period. Area Developer must enter into each Franchise Agreement while Franchisor is still offering franchises.
2.3 Force Majeure
- 2.3.1 Subject to Area Developer's continuing compliance with Section 2.3.2, should Area Developer be unable to meet the Development Obligation for any Development Period solely as the result of Force Majeure or any legal disability of Franchisor to deliver a Franchise Disclosure Document pursuant to Section 6.2 of this Development Agreement, which results in the inability of Area Developer to construct or operate the Restaurants in all or substantially all of the Development Area pursuant to the terms of this Development Agreement, the particular Development Period during which the event of Force Majeure (or Franchisor's legal disability to deliver a Franchise Disclosure Document) occurs shall be extended by an amount of time equal to the time period during which the Force Majeure (or Franchisor'slegal disability to deliver a Franchise Disclosure Document)shall have existed during that Development Period.Development Periods during which no such Force Majeure (or legal disability) existed shall not be extended.
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, an Area Developer must construct, equip, open, and operate a minimum cumulative number of restaurants within their designated Development Area during each Development Period, as outlined in Exhibit B. This obligation ensures that the Area Developer actively expands the Hck Hot Chicken brand within their territory according to the agreed-upon schedule.
Furthermore, the Area Developer is required to execute a lease (or purchase agreement) and Franchise Agreement, and pay the initial franchise fee for each restaurant that needs to be operational by the end of each Development Period. This must be done at least 180 days before the end of each Development Period. This stipulation ensures that the Area Developer makes timely progress in securing locations and franchise rights for the restaurants they are obligated to open.
It's important to note that all Hck Hot Chicken restaurants that are open and operating, and have been assigned to Affiliates of the Area Developer with the Franchisor's consent, will count towards fulfilling the Development Obligation. However, this is conditional on the Affiliate continuing to meet the requirements outlined in Section 7.2.2 of the Development Agreement. This allows for some flexibility in how the Area Developer structures their operations while still maintaining accountability for meeting the development targets.
Finally, the Development Period may be extended if the Area Developer is unable to meet the Development Obligation due to Force Majeure or any legal disability of Franchisor to deliver a Franchise Disclosure Document. The extension will be equal to the time period during which the Force Majeure or legal disability existed, provided the Area Developer continues to comply with Section 2.3.2 of the Development Agreement. This clause provides a safeguard for unforeseen circumstances that may hinder the Area Developer's ability to meet their obligations.