If requested by Hck Hot Chicken, what must the Area Developer and its Affiliates execute and deliver?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer shall not offer, sell, or negotiate the sale of "HCK Hot Chicken" franchises to any third party, either in Area Developer's own name or in the name and/or on behalf of Franchisor, or otherwise subfranchise, sub act, sublicense, share, divide or partition this Development Agreement, and nothing in this Development Agreement will be construed as granting Area Developer the right to do so. Area Developer shall not execute any Franchise Agreement with Franchisor, or construct or equip any Restaurant with a view to offering or assigning such Franchise Agreement or Restaurant to any third party.
- 7.2.2 Notwithstanding Section 7.2.1, Area Developer may, with Franchisor's prior written consent, execute and contemporaneously assign a Franchise Agreement executed pursuant hereto to a separate Entity controlled by Area Developer (each a "Subsidiary"); provided and on condition that:
- (a) Upon Franchisor's request, Area Developer has delivered to Franchisor a true, correct, and complete copy of the Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, partnership agreement, and other organizational documents, and Franchisor has accepted the same;
- (b) The Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, and partnership agreement, as applicable, shall provide that its activities are confined exclusively to operating Restaurants;
- (c) Area Developer, directly owns and controls all of the Equity and voting rights of the Subsidiary;
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken Franchise Disclosure Document, an Area Developer may assign a Franchise Agreement to a separate entity (a "Subsidiary") controlled by the Area Developer, provided that Hck Hot Chicken gives prior written consent.
If Hck Hot Chicken requests it, the Area Developer must deliver a true, correct, and complete copy of the Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, partnership agreement, and other organizational documents. Hck Hot Chicken must accept these documents. The Subsidiary's organizational documents must state that its activities are confined exclusively to operating Hck Hot Chicken Restaurants.
Additionally, the Area Developer must directly own and control all equity and voting rights of the Subsidiary. The Subsidiary must be in good standing in its jurisdiction of organization and any other jurisdiction where its business operations require qualification. The person designated by the Area Developer as the Operating Principal must have exclusive day-to-day operational control over the Subsidiary, and the Subsidiary can conduct no business other than the operation of the Restaurant. Finally, the Subsidiary must assume all obligations under the Franchise Agreement as the area developer, pursuant to a written agreement that is acceptable in form and substance to Hck Hot Chicken.