What happens to all rights of the Hck Hot Chicken franchisee under the agreement upon termination?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
or otherwise. If Franchisee terminates this Agreement pursuant to this Section, Franchisee shall comply with all of the terms and conditions of Section 15 of this Agreement.
SECTION 15. RIGHTS AND OBLIGATIONS UPON TERMINATION
- 15.1 General. Upon the expiration or termination of Franchisee's rights granted under this Agreement:
- 15.1.1 Franchisee shall immediately cease to use all Trade Secrets, the Marks, and any confusingly similar trademark, service mark, trade name, logotype, or other commercial symbol or insignia. Franchisee shall immediately return the HCK Hot Chicken Brand Standards Manual, all training materials, electronic files, records, customer lists, files, advertising and promotional materials and all other written materials incorporating Trade Secrets and all copies of the whole or any part thereof to Franchisor. Franchisee shall at its own cost make cosmetic changes to the Franchised Restaurant so that it no longer contains or resembles Franchisor's proprietary designs, including: Franchisee shall remove all materials that would identify the
Premises and Location as a Restaurant operated under the Marks and System, and remove distinctive cosmetic features and finishes, soffits, interior wall coverings and colors, exterior finishes and colors and signage from the Premises and Location as Franchisor may reasonably direct and shall, at Franchisor's request, grant Franchisor access to the Premises to make cosmetic changes to the Franchised Restaurant so that it no longer resembles a Restaurant. Or in the alternative, if Franchisor so elects, at its sole option, upon any termination or expiration of this Agreement, Franchisor shall have an immediate right to enter and take possession of the Franchised Restaurant in order to maintain continuous operation of the Franchised Restaurant, to provide for orderly change of management and disposition of personal property and to otherwise protect Franchisor's interest.
- 15.1.2 If Franchisor so elects, at its sole option, upon any termination or expiration of this Agreement, Franchisee will sell to Franchisor such equipment and furnishings as Franchisor may designate that are associated with the Franchised Restaurant at their then-current fair market value. If Franchisor and Franchisee cannot agree upon a fair market value for any equipment or furnishings, then Franchisor and Franchisee will each retain an independent appraiser at their own costs to prepare an appraisal of the fair market value and the average of the two appraisals shall be the fair market value and the purchase price. Upon the expiration or termination of Franchisee's rights under the Franchise Agreement, to the extent it does not conflict with an otherwise valid lien held by a lender or the terms of any lending agreement, Franchisor shall hold an option to purchase, and Franchisee shall agree to sell, such equipment or furnishings as Franchisor may designate that are associated with the Restaurant at its then-current fair market value. If Franchisor and Franchisee cannot agree upon a fair market value for any equipment or furnishings, then Franchisor and Franchisee will each retain an independent appraiser at their own costs to prepare an appraisal of the fair market value and the average of the two appraisals shall be the fair market value and the purchase price right. Franchisor shall have no other payment obligations to Franchisee, and Franchisee specifically waives any and all claims to be paid for other equipment, furnishings, fixtures, products, supplies or the goodwill associated with the terminated Franchised Restaurant (which goodwill Franchisee acknowledges is owned exclusively by Franchisor). Franchisor may offset against any obligations it may have pursuant to this Section any amounts owed by Franchisee to Franchisor.
- 15.1.3 Franchisor may retain all fees paid pursuant to this Agreement, and Franchisee shall immediately pay any and all amounts owing to Franchisor, its Affiliates, and/or suppliers.
- 15.1.4 Any and all obligations of Franchisor to Franchisee under this Agreement shall immediately cease and terminate.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee must immediately cease using all trade secrets, marks, and any confusingly similar trademarks. The franchisee is also required to return the Hck Hot Chicken Brand Standards Manual, all training materials, electronic files, records, customer lists, advertising and promotional materials, and all other written materials incorporating trade secrets to Hck Hot Chicken.
Additionally, the franchisee is responsible for making cosmetic changes to the franchised restaurant at their own cost so that it no longer resembles Hck Hot Chicken's proprietary designs. This includes removing materials that identify the premises as a Hck Hot Chicken restaurant, such as distinctive cosmetic features, finishes, soffits, interior wall coverings and colors, exterior finishes and colors, and signage. At Hck Hot Chicken's request, the franchisee must grant Hck Hot Chicken access to the premises to make these changes. Alternatively, Hck Hot Chicken has the option to enter and take possession of the franchised restaurant to maintain continuous operation, manage the change of management, dispose of personal property, and protect its interests.
Furthermore, Hck Hot Chicken has the option to purchase designated equipment and furnishings associated with the franchised restaurant at their then-current fair market value. If the franchisee and Hck Hot Chicken cannot agree on the fair market value, each party will retain an independent appraiser at their own cost, and the average of the two appraisals will determine the purchase price. The franchisee must also promptly execute and file documents to revoke or terminate any assumed name registration related to the Hck Hot Chicken business, and if they fail to do so, the franchisee irrevocably appoints Hck Hot Chicken as their attorney-in-fact to complete this process.