factual

What sections of the Hck Hot Chicken agreement are referenced regarding compliance that could lead to termination?

Hck_Hot_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 7.1 Compliance with Applicable Law. Franchisee shall operate the Franchised Restaurants as a clean, orderly, legal, and respectable place of business in accordance with Franchisor's business standards and merchandising policies and shall comply with all Applicable Laws. Franchisee shall not cause or allow any part of its Location or Premises to be used for any immoral or illegal purpose. Franchisee shall in all dealings with its customers, suppliers, and public officials adhere to high standards of honesty, integrity, fair dealing and ethical conduct and refrain from engaging in any action (or failing to take any action) which will cause

Franchisor to be in violation of any Applicable Law. Franchisee shall refrain from engaging in action (or failing to take any action), which in the sole opinion of Franchisor, causes or could cause harm to the Marks, the System and/or the HCK Hot Chicken brand. If Franchisee shall receive any notice, report, fine, test results or the like from the applicable state or local department of health (or other similar Governmental Authority), Franchisee shall promptly send a copy of the same to Franchisor. Franchisee shall correct any such deficiency noted within 10 days or such fewer number of days as required by the applicable Governmental Authority.

  • 7.4.4 Franchisee acknowledges that its compliance with the HCK Hot Chicken Brand Standards Manual is vitally important to Franchisor and to other franchisees and is necessary to protect Franchisor's reputation and the goodwill of the Marks and to maintain the uniform quality of operation for all franchisees.

  • 11.9 Assumed Name Registration. If Franchisee is required to do so by Applicable Law, Franchisee shall promptly upon the execution of this Agreement file with applicable Governmental Authorities, a notice of its intent to conduct its business under the name "HCK Hot Chicken" with only such additional prefix or suffix as may be required by Franchisor from time to time. Promptly upon the expiration or termination of this Agreement for any reason whatsoever, Franchisee shall promptly execute and file such documents as may be necessary to revoke or terminate such assumed name registration, and if Franchisee shall fail to promptly execute and file such documents as may be necessary to effectively revoke and terminate such assumed name registration, Franchisee hereby irrevocably appoints Franchisor as its attorney-in-fact to do so for and on behalf of Franchisee.

  • 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.

  • 14.3.8 Misrepresentation.

If Franchisee makes any material misrepresentations relating to the acquisition of this Agreement.

  • 14.3.9 Health or Safety Violations.

Franchisee's conduct of the Franchised Restaurant is so contrary to this Agreement, the System and the HCK Hot Chicken Brand Standards Manual as to constitute an imminent danger to the public health (for example, selling spoiled food knowing that the food products are spoiled or allowing a dangerous condition arising from a failure to strictly comply with any health code or ordinance or other Applicable Law to continue despite Franchisee's knowledge of such condition), or selling expired or other unauthorized products to the public after notice of default and continuing to sell such products whether or not Franchisee has cured the default after one or more notices.

  • 14.3.10 Failure to Complete Training.

If Franchisee, the initial Operating Principal or the initial Restaurant Manager fails to complete all phases of the Initial Training Program or the Extra Practice Week to Franchisor's satisfaction prior to the opening of the Franchised Restaurant.

  • 14.4 Termination with Notice and Opportunity to Cure.

Except for any default by Franchisee under Sections 14.2 or 14.3 of this Agreement, and as otherwise expressly provided elsewhere in this Agreement, Franchisee shall have 30 days (10 days in the case of any default in the timely payment of sums due to Franchisor or its Affiliates) after Franchisor's written notice of default within which to remedy any default under this Agreement, and to provide evidence of such remedy to Franchisor.

If any such default is not cured within that time period, or such longer time period as Applicable Law may require or as Franchisor may specify in the notice of default, this Agreement and all rights granted by it shall thereupon automatically terminate without further notice or opportunity to cure.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)

What This Means (2025 FDD)

According to the 2025 Hck Hot Chicken Franchise Disclosure Document, several sections of the franchise agreement outline compliance issues that could lead to termination. Section 7.1 discusses compliance with applicable laws, stating that the franchisee must operate the restaurant legally and ethically, adhering to Hck Hot Chicken's brand standards. Failure to do so, or any action that could harm the Hck Hot Chicken brand, could result in termination. Section 7.4.4 emphasizes the importance of adhering to the Hck Hot Chicken Brand Standards Manual to protect the brand's reputation and maintain uniform quality. A breach of this section constitutes a material default of the agreement.

Section 14.3 lists conditions under which Hck Hot Chicken can terminate the agreement without allowing the franchisee an opportunity to cure the default. These include abandoning the restaurant (as defined in detail), making misrepresentations related to the agreement's acquisition, or engaging in conduct that poses an imminent danger to public health or safety, such as selling spoiled food. Failure to complete the initial training program is also grounds for immediate termination.

Section 14.4 states that for defaults not covered in Sections 14.2 or 14.3, the franchisee typically has 30 days to remedy the default after receiving written notice, though this period is reduced to 10 days for payment defaults. Failure to cure the default within the specified time may result in automatic termination. Section 11.9 requires franchisees to register their intent to conduct business under the Hck Hot Chicken name and to revoke this registration upon termination of the agreement. Failure to do so allows Hck Hot Chicken to act as the franchisee's attorney-in-fact to revoke the registration.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.