Under what general condition does Hck Hot Chicken have the right to terminate the Franchise Agreement?
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)
According to the 2025 Hck Hot Chicken Franchise Disclosure Document, Hck Hot Chicken has the option to terminate the Franchise Agreement under specific conditions, with or without an opportunity for the franchisee to correct the issue.
One condition that allows Hck Hot Chicken to terminate the agreement without providing an opportunity to cure is if the franchisee abandons the franchised restaurant. Abandonment is defined as failing to keep the premises open for business for three consecutive days (with exceptions outlined in the Hck Hot Chicken Brand Standards Manual), or any period that leads Hck Hot Chicken to reasonably believe the franchisee doesn't intend to continue operations. It also includes failing to maintain and answer the restaurant's phone line using the "Hck Hot Chicken" name, losing permission from the lessor resulting in the inability to operate, or being forced to close due to violations of applicable law that were a result of a violation of the agreement by the franchisee.
Another condition that allows Hck Hot Chicken to terminate the agreement is if the franchisee makes any material misrepresentations relating to the acquisition of the agreement. Hck Hot Chicken can also terminate the agreement if the franchisee's conduct of the franchised restaurant poses an imminent danger to public health, such as selling spoiled food knowingly or failing to comply with health codes, or selling expired or unauthorized products after receiving a notice of default. Furthermore, failure of the franchisee, the initial Operating Principal, or the initial Restaurant Manager to complete all phases of the Initial Training Program or the Extra Practice Week to Hck Hot Chicken's satisfaction prior to opening the franchised restaurant can also result in termination.
In cases other than those described above, Hck Hot Chicken must provide the franchisee with a written notice of default and an opportunity to remedy the default within 30 days (or 10 days for defaults in timely payments). If the franchisee fails to cure the default within the specified time, the agreement will automatically terminate. In the event of a default by the franchisee, the franchisee is responsible for covering all of Hck Hot Chicken's costs and expenses resulting from the default, including legal fees and administrative employee charges.