factual

What costs and expenses arising from a franchisee's default are the responsibility of the Hck Hot Chicken franchisee?

Hck_Hot_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

r as Franchisor may specify in the notice of default, this Agreement and all rights granted by it shall thereupon automatically terminate without further notice or opportunity to cure.

  • 14.5 Reimbursement of Franchisor Costs. In the event of a default by Franchisee, all of Franchisor's costs and expenses arising from such default, including reasonable legal fees and reasonable hourly charges of Franchisor's administrative employees shall be paid to Franchisor by Franchisee within five days after cure or upon demand by Franchisor if such default is not cured.
  • 14.6 Assumption of Management; Step-In Rights. In order to prevent any interruption of operations which would cause harm to the Franchised Restaurant, thereby depreciating the value thereof, Franchisor has the right, but not the obligation, to step-in and designate an individual or individuals of its choosing ("Interim Manager") for so long as Franchisor deems necessary and practical to temporarily manage the Franchised Restaurant: (i) if Franchisee fails to comply with any System standard or provision of this Franchise Agreement and does not cure the failure within the time period specified by the Franchise Agreement or by Franchisor; (ii) if Franchisor determines in its sole judgment that the operation of the Franchised Restaurant is in jeopardy; (iii) if Franchisor determines in its sole discretion that operational problems require that Franchisor operate the Franchised Restaurant;

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

What This Means (2025 FDD)

According to Hck Hot Chicken's 2025 Franchise Disclosure Document, if a franchisee defaults, they are responsible for covering all of Hck Hot Chicken's costs and expenses that arise from the default. This includes reasonable legal fees and reasonable hourly charges for Hck Hot Chicken's administrative employees. The franchisee must pay these costs within five days after curing the default or upon demand by Hck Hot Chicken if the default is not cured.

Additionally, if Hck Hot Chicken chooses to cure the franchisee's default on their behalf, the franchisee must pay the cost Hck Hot Chicken incurs. This cost is due on demand and is considered additional compensation to Hck Hot Chicken. It will be added to the next accruing compensation payment.

Furthermore, if an inspection reveals deficiencies, the franchisee is responsible for an $850 fee for the first offense and $2,500 for any additional offense. They must also reimburse Hck Hot Chicken for all costs and expenses, including legal and professional fees, related to the audit or inspection.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.