Who owns the goodwill associated with the terminated Hck Hot Chicken Franchised Restaurant?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken Franchise Disclosure Document, Hck Hot Chicken retains ownership of the goodwill associated with the brand. Upon termination of the franchise agreement, the franchisee must immediately stop using all trade secrets, trademarks, service marks, trade names, logotypes, or other commercial symbols associated with Hck Hot Chicken. The franchisee is also required to return the Hck Hot Chicken Brand Standards Manual, training materials, electronic files, records, customer lists, and all other written materials incorporating trade secrets to Hck Hot Chicken.
To ensure the terminated location no longer resembles a Hck Hot Chicken restaurant, the franchisee is responsible for making cosmetic changes to the premises at their own cost. This includes removing all materials that identify the location as a Hck Hot Chicken restaurant, such as distinctive cosmetic features, finishes, wall coverings, colors, and signage. At Hck Hot Chicken's request, the franchisee must grant access to the premises for Hck Hot Chicken to make these changes. Alternatively, Hck Hot Chicken has the option to take possession of the restaurant to maintain continuous operation and protect its interests.
These measures ensure that upon termination, the goodwill associated with the Hck Hot Chicken brand remains with the franchisor, and the franchisee cannot continue to benefit from the brand's reputation and recognition. The franchisee's compliance with these post-termination obligations is critical to protecting Hck Hot Chicken's brand and maintaining uniformity across all franchise locations.