Does the Hck Hot Chicken definition of 'Assets' include leasehold interests?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
"Assets" means all of the following personal property and assets owned by Franchisee or in which Franchisee otherwise has any rights, and located at, or used in connection with the Franchised Restaurant: (a) all accounts, licenses, permits, and contract rights, including this Agreement, leasehold interests, all telephone and telecopier numbers, telephone and other directory listings, general intangibles, receivables, claims of Franchisee, all guaranties and security therefor and all of Franchisor's right, title and interest in the goods purchased and represented by any of the foregoing; (b) all chattel paper including electronic chattel paper and tangible chattel paper; (c) all documents and instruments; (d) all letters of credit and letter-of-credit rights and all supporting obligations; (e) all deposit accounts; (f) all investment property and financial assets; (g) all inventory and products thereof and documents therefor; (h) all furniture, fixtures, equipment, leasehold improvements and machinery, wherever located and all documents and general intangibles covering or relating thereto; (i) all books and records pertaining to the foregoing, including computer programs, data, certificates, records, circulation lists, subscriber lists, advertiser lists, supplier lists, customer lists, customer and supplier contracts, sales orders, and purchasing records; (j) all software including computer programs and supporting information; (k) all commercial tort claims; (l) all other personal property of Franchisee of any kind used in connection with the Franchised Restaurant; and (m) all proceeds of the foregoing, including proceeds of insurance policies.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the definition of 'Assets' includes leasehold interests. Specifically, the definition encompasses all personal property and assets owned by the franchisee or in which the franchisee has rights, located at or used in connection with the franchised restaurant. This includes accounts, licenses, permits, contract rights, and importantly, leasehold interests.
This definition is important for a prospective franchisee because it clarifies what Hck Hot Chicken considers to be the franchisee's assets within the context of the franchise agreement. Understanding this definition can be crucial in various scenarios, such as when determining collateral for financing, assessing the value of the franchise in case of a sale, or understanding the implications of asset ownership upon termination or transfer of the franchise agreement.
Furthermore, the definition extends beyond just physical assets to include intangible assets like licenses, permits, and contract rights, providing a comprehensive view of what constitutes the franchisee's assets. This broad definition protects the franchisor and franchisee in case of disputes over ownership or rights related to the restaurant's operation. It is advisable for potential franchisees to carefully review this definition with legal counsel to fully understand its implications and how it may affect their rights and obligations under the franchise agreement.