During the Interim Period for Hck Hot Chicken, what happens to the franchisee's obligations?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ction or guilty plea, whichever first occurs, to sell its interest in Franchisee to Franchisee's other Owners; or (ix) Franchisee's and any Restricted Person's failure to comply with Section 12 or Section 20 of this Agreement.
- 14.3 Option to Terminate Without Opportunity to Cure. Franchisee shall be deemed to be in default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without affording Franchisee any opportunity to cure the default, effective immediately upon receipt of notice by Franchisor upon the occurrence of any of the following events:
- 14.3.1 Abandonment. If Franchisee shall abandon the Franchised Restaurant. For purposes of this Agreement, "abandon" shall refer to (i) Franchisee's failure, at any time during the term of this Agreement, to keep the Premises or Franchised Restaurant open and operating for business for a period of three consecutive days, except as provided in the HCK Hot Chicken Brand Standards Manual, (ii) Franchisee's failure to keep the Premises or Franchised Restaurant open and operating for any period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchised Restaurant, unless such failure to operate is due to Force Majeure (subject to Franchisee's continuing compliance with this Agreement), (iii) failure to actively and continuously maintain and answer the telephone listed by Franchisee for the Franchised Restaurant solely with the "HCK Hot Chicken" name (as the same may be modified in accordance with this Agreement); (iv) the withdrawal of permission from the applicable lessor that results in Franchisee's inability to continue operation of the Franchised Restaurant; or (v) closing of the Franchised Restaurant required by Applicable Law if such closing was not the result of a violation of this Agreement by Franchisor.
- 14.3.2 Assignment, Death, or Incapacity. If Franchisee shall purport to make any Assignment without the prior written consent of Franchisor; provided, however, that if the Franchised Restaurant continues to be operated in conformity with this Agreement (i) upon prompt written request and upon the death or legal incapacity of a Franchisee who is an individual, Franchisor shall allow up to nine months after such death or legal incapacity for the heirs, personal representatives, or conservators (the "Heirs") of Franchisee either to enter into a new Franchise Agreement upon Franchisor's then- current form (except that no initial franchise fee or transfer fee shall be charged), if Franchisor is subjectively satisfied that the Heirs meet Franchisor's standards and qualifications, or if not so satisfied to allow the Heirs to sell the Franchised Restaurant to a person approved by Franchisor, or (ii) upon prompt written request and upon the death or legal incapacity of an Owner owning twenty percent (20%) or more of the Equity or voting power of a corporate or limited liability company Franchisee, or a general or limited partner owning twenty percent (20%) or more of any of the Partnership Rights of a Franchisee which is a Partnership, Franchisor shall allow a period of up to nine months after such death or legal incapacity for the Heirs to seek and obtain Franchisor's consent to the transfer or Assignment of such stock, membership interests or Partnership Rights to the Heirs or to another person acceptable by Franchisor. If, within said nine-month period, the Heirs fail either to enter into a new franchise agreement or to sell the Franchised Restaurant to a person approved by Franchisor pursuant to this Agreement, or fail either to receive Franchisor's consent to the Assignment of such Equity to the Heirs or to another person acceptable by Franchisor, as provided in this Agreement, this Agreement shall thereupon automatically terminate.
- 14.3.3 Repeated Defaults. If Franchisee shall default in any obligation as to which Franchisee has previously received two or more written notices of default from Franchisor setting forth the default complained of within the preceding 12 months, such repeated course of conduct shall itself be grounds for termination of this Agreement without further notice or opportunity to cure.
- 14.3.4 Violation of Law.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
Based on the 2025 Hck Hot Chicken Franchise Disclosure Document, the franchisee's obligations during an interim period are not explicitly detailed. However, the document does outline conditions under which Hck Hot Chicken can terminate the franchise agreement, which implies certain obligations must be maintained by the franchisee to avoid termination.
Specifically, Hck Hot Chicken can terminate the agreement without an opportunity to cure if the franchisee abandons the restaurant, which includes failing to keep the restaurant open for three consecutive days or any period that leads the franchisor to believe the franchisee doesn't intend to continue operations. Termination can also occur due to issues like misrepresentation during the agreement acquisition or health and safety violations that pose an imminent danger to public health. Furthermore, failure to complete the required training can also lead to termination without an opportunity to cure.
Additionally, Hck Hot Chicken retains the right to modify the Hck Hot Chicken Brand Standards Manual, and franchisees are obligated to comply with these standards. Failure to adhere to these standards, as well as other terms and conditions of the franchise agreement, can result in the franchisor taking action to cure the default on behalf of the franchisee, with the franchisee bearing the costs. Therefore, while the term "Interim Period" is not defined, the franchisee is expected to maintain operational standards, meet financial obligations, and adhere to brand standards to avoid potential default and/or termination of the franchise agreement.