Can the Hck Hot Chicken franchisor change the delivery terms for goods and services?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the franchisor or its affiliates can change the delivery terms for the goods and services they sell to franchisees. The franchisor must provide prior written notice of these changes. However, the prices charged to the franchisee must be the same as those charged to other similarly situated franchisees. This excludes costs and expenses related to shipping, transportation, warehousing, and insurance.
This means that Hck Hot Chicken franchisees need to stay informed about potential changes to delivery terms, as these could impact their operational costs and efficiency. While the franchisor commits to providing written notice, franchisees should proactively seek clarification on any upcoming changes to prepare accordingly. Franchisees should also verify that the prices they are charged are consistent with those offered to other franchisees in similar situations, keeping in mind the allowable exclusions for shipping and related expenses.
The franchisor also has the discretion to discontinue the sale of any goods or services if they deem it unfeasible, unprofitable, or otherwise undesirable. Additionally, the franchisor is not liable for delays in shipment or receipt of merchandise due to various factors beyond their control, such as product shortages, transportation issues, or natural disasters. This highlights the importance of franchisees maintaining adequate inventory levels and having contingency plans in place to mitigate potential disruptions in the supply chain.
Overall, while Hck Hot Chicken retains the right to modify delivery terms and discontinue products, the obligation to provide written notice and maintain consistent pricing among franchisees offers a degree of protection. Franchisees should carefully monitor communications from the franchisor and engage in open dialogue to address any concerns related to these changes.