What right does Hck Hot Chicken grant to the franchisee regarding the operation of a Restaurant?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
2.3.1 If "No Territorial Rights" is selected in Attachment A, the franchise and license and other rights granted in this Agreement are for the Location only at the specific numbered street address at which the Franchised Restaurant shall be physically located and Franchisee acknowledges the franchise and license granted to Franchisee under this Agreement is nonexclusive and it has no territorial protection under this Agreement.
If an area is selected and described in Attachment A, then during the Term, neither Franchisor nor any Affiliate of Franchisor shall open or operate any Traditional Restaurant, nor license others to do so, within the geographic area described on Attachment A (the "Territory").
2.3.2 Except to the limited extent expressly provided in Section 2.3 of this Agreement, the license granted to the Franchisee under this Agreement is nonexclusive and Franchisor expressly reserves all other rights including, the exclusive, unrestricted right, in its discretion, directly and indirectly, itself and through its employees, Affiliates, representatives, franchisees, licensees, assigns, agents and others:
(a) to own or operate, and to license others (which may include its Affiliates) to own or operate:
(i) "HCK Hot Chicken" Restaurants at any location outside the Territory, and regardless of proximity to Franchisee's Restaurant, even if doing so will or might affect Franchisee's Restaurant;
(ii) Non-Traditional Restaurants at any location, and of any type whatsoever, within or outside the Territory, and regardless of proximity to Franchisee's Restaurant, even if doing so will or might affect Franchisee's Restaurant; provided that Franchisee shall be given a right of first refusal for any Non-Traditional Restaurant in a shopping center which is over 500,000 square feet in size located within Franchisee's Territory (Franchisee shall have seven days following Franchisor's notice to execute Franchisor's then-current form of franchise agreement and all ancillary documents and pay Franchisor's then-current initial franchise fee); and
(iii) Restaurants or other businesses operating under names other than "HCK Hot Chicken", at any location, and of any type whatsoever, within or outside the Territory and regardless of their proximity to Franchisee's Restaurant;
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the rights granted to a franchisee regarding the operation of a restaurant depend on whether territorial rights are included in the franchise agreement. If "No Territorial Rights" is selected in Attachment A of the agreement, the franchisee's rights are limited to the specific location of the franchised restaurant. In this case, the franchise is nonexclusive, and the franchisee receives no territorial protection.
However, if a geographic area is described in Attachment A, the franchisee is granted a Territory. Within this Territory, Hck Hot Chicken agrees not to open or operate any Traditional Restaurants, nor license others to do so, during the term of the agreement. This provides the franchisee with a degree of territorial exclusivity, protecting them from direct competition from other traditional Hck Hot Chicken restaurants within their defined area.
Even with a defined Territory, the license granted to the franchisee is generally nonexclusive. Hck Hot Chicken retains the right to operate or license others to operate Hck Hot Chicken Restaurants outside the Territory, Non-Traditional Restaurants (of any type) within or outside the Territory, and restaurants operating under other names within or outside the Territory. The franchisee does, however, have a right of first refusal for any Non-Traditional Restaurant in a shopping center over 500,000 square feet located within their Territory, giving them the first opportunity to franchise that location under the standard agreement and fee structure.