I_Got_My_Sound_Chicken 2024 Franchise FAQ - FDD Ninja

Question 1

What happens if the Designated Manager for an I Got My Sound Chicken franchise needs to be replaced?

Accepted Answer

ompensate the personnel who teach the courses and to defray the expenses of such courses. If you need to replace your Designated Manager, the replacement Designated Manager must attend and complete the supplemental training program to our satisfaction as soon as is practicable. For this training, we charge a Supplemental Training Fee to train replacement Designated Managers, which is currently \$100 per hour

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 2

According to I Got My Sound Chicken, what documents are considered trade secrets?

Accepted Answer

- 11.1 Franchisor shall lend to Franchisee, or provide Franchisee with access to, its current confidential operations manuals, which may consist of one or more manuals, directives and memos published by Franchisor (the "Confidential Operations Manuals" or "Manuals") by hard or electronic copy or via the inter/intranet to use during the term of this Agreement. The Confidential Operations shall include, in part, the business procedures, technical advice and rules and regulations for operating the business, which Franchisee must comply.
  - 11.2 Franchisee acknowledges and agrees that:
- A. The Confidential Operations Manuals as modified by Franchisor from time to time are, and shall remain, the property of Franchisor throughout the term of this Agreement, any renewal hereof and thereafter;
- B. The Confidential Operations Manuals contains confidential information which Franchisee will protect as a trade secret, and its loss will cause substantial damage to Franchisor and other franchisees, although the amount of such loss would be incalculable with any degree of accuracy;
- C. Franchisee shall not reprint or reproduce any portion of the Confidential Operations Manuals for any reason;
- D. Franchisee must operate the Franchised Restaurant in compliance with the terms of the Confidential Operations Manuals and immediately conform its operations to all revisions in mandatory specifications, standards, operating procedures and rules prescribed by Franchisor; and
- E. Upon termination of this Agreement for any reason, Franchisee will immediately return the Confidential Operations Manuals to Franchisor.
- 11.3 Franchisor may add to or otherwise modify the Confidential Operations Manuals, from time to time, in Franchisor's sole discretion, whenever it considers such additions or modifications desirable
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to improve or maintain the standards of the System and its efficient operation, or to protect or maintain the goodwill associated with the "I Got My Sound Chicken" name and Marks or to meet competition, provided such additions or modifications are system-wide in nature and do not substantially increase Franchisee's economic burden.

Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 32–33)

Question 3

What aspects of operating and managing an I Got My Sound Chicken franchised business are covered in the initial training program?

Accepted Answer

the transferee remodel and/or redecorate the Restaurant premises.

### **J. Training**

- 1. Our new franchisee initial training program consists of approximately one week of instruction by our management team concerning all aspects of the operation and management of the Franchised Business. The initial training includes review and discussion of the Confidential Operations Manual and all aspects of the operation of your business. The training should be scheduled near the time of the completion of the construction of your I Got My Sound Chicken Restaurant and after hiring your key employees, but at least two weeks prior to the opening of your Restaurant. The initial training will be scheduled based on your and our availability. All participants must attend the training together and comply with the schedule set for the training. Our initial training program will be offered at various times, as often as needed during the year, depending on the number of new franchisees entering the System, replacement managers, and other personnel needing training, the number of new Restaurants being opened and the timing of the scheduled openings of the Restaurants.
- 2. The training will take place at our corporate Restaurant located in Fullerton, California, or at another location or locations as we may designate, and will be conducted by our instructors. An Approved Manager (defined in Item 15 below) who may be the Operating Principal (defined in Item 15 below) must attend and successfully complete the training at our sole discretion. Other personnel may attend the initial training subject to the Additional Training Fee for training more than 4 persons (see Item 6 above for details). A person who has successfully completed our new franchisee training program must at all times actively supervise the operation of your I Got My Sound Chicken Restaurant.
- 3. For all required initial training courses, we will provide, at no charge to you, instructors and training materials.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 4

Before commencing a Renewal Term for an I Got My Sound Chicken franchise, what is the franchisee required to do regarding the restaurant's appearance?

Accepted Answer

isor and/or affiliated corporation of Franchisor, and their respective officers, directors, agents and employees;
- H. Franchisee shall comply with Franchisor's then-current reasonable qualification and training requirements;
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- I. Before commencement of the Renewal Term, Franchisee shall refurbish, remodel, redesign, upgrade and/or renovate the Restaurant as Franchisor requires in order for the Restaurant to meet the then-current standards and image for the I Got My Sound Chicken Restaurants; and
- J. Franchisee shall remit to Franchisor a renewal fee equal to Twenty Five Thousand Dollars (\$25,000.00).
- 4.4 Within three (3) months of the receipt of a notice from Franchisee pursuant to Section 4.3 hereof, Franchisor shall complete a report specifying t

Source: Item 22 — Contracts (FDD page 40)

Question 5

What is the current supplemental training fee for a replacement Designated Manager for I Got My Sound Chicken?

Accepted Answer

ompensate the personnel who teach the courses and to defray the expenses of such courses. If you need to replace your Designated Manager, the replacement Designated Manager must attend and complete the supplemental training program to our satisfaction as soon as is practicable. For this training, we charge a Supplemental Training Fee to train replacement Designated Managers, which is currently \$100 per hour

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 6

Can an I Got My Sound Chicken franchisee claim against the franchisor for failing to enforce standards against other franchisees?

Accepted Answer

- 1.8 Franchisor, in its sole discretion, reserves the right to approve exceptions or deviations from the System. Franchisee acknowledges it has no right to object to variances granted to others and to claim against Franchisor for failing to enforce standards of the System against other I Got My Sound Chicken franchisees.

Source: Item 22 — Contracts (FDD page 40)

Question 7

What must an I Got My Sound Chicken franchisee do to protect the manuals and other trade secret material?

Accepted Answer

igations for Proprietary Marks described in Item 13 of this disclosure document.
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- C. Our confidential Operations Manuals, other manuals, training material, merchandise and vendor lists and updates, action plans, and other directives contain material which we consider to be trade secrets. You must operate the Restaurant in accordance with the standards and procedures specified in the Operations Manuals. One copy of the Operations Manuals will be loaned to you or given access to you via inter/intranet by us for the term of the Franchise Agreement. We claim trade secret and copyright protection for these manuals and materials although we have not filed any corresponding applications concerning them. You have to follow our direction in protecting the manuals and other trade secret material from unauthorized disclosure. You must use our proprietary materials only as we direct. You must also use all reasonable efforts to maintain this information as secret and confidential and you must not duplicate, copy, record or otherwise reproduce these materials, in whole or in part, or make them available to unauthorized person. The Manuals remain our sole property.
- D. All of your employees, managers and supervisors must sign a confidentiality agreement in which they promise to keep all of our proprietary information confidential and to follow our directions regarding its use. Your principals also must sign this confidentiality agreement. We will be a third party beneficiary of the confidentiality agreement with the independent right to enforce them.
- E. Neither you nor your controlling principals are permitted at any time, without first obtaining our written consent, to copy, record or otherwise reproduce the materials or information nor make them available to any unauthorized person. Any and all information, knowledge, know-how and techniques related to the System that we communicate to you, including the Manuals, recipes, plans and specifications, marketing information and strategies and site evaluation, selection guidelines and techniques, are considered confidential.

### **ITEM 15**

# **OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS**

- A. If you are an individual, you must devote full time and attention to supervising all administrative and operational activities of your franchised business at the franchise location. You and your spouse must sign a personal guaranty.
- B. If a legal entity owns the franchise rights, like a corporation, partnership or limited liability company, the person who owns a controlling interest in the entity's equity or voting rights, or a general partner, must devote full time and attention to franchise activities. All individual owners of such legal entity and their spouses must sign a personal guaranty. If none of the owners owns a controlling interest in the entity's equity or voting rights, you must designate one of your owners as your "Operating Principal," primarily responsible for the Franchised Business.

Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 32–33)

Question 8

If I am an individual franchisee for I Got My Sound Chicken, who is required to sign a personal guaranty?

Accepted Answer

- A. If you are an individual, you must devote full time and attention to supervising all administrative and operational activities of your franchised business at the franchise location. You and your spouse must sign a personal guaranty.

Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 33–34)

Question 9

Who leads the operations team that conducts the I Got My Sound Chicken training?

Accepted Answer

Our training is conducted by our operations team, led by Ms. A Rum Kim, who has been our CEO since our formation. Ms. Kim has been the CEO of SFI Korea, our parent disclosed in Item 1 above, from January 2020 to September 2022 and the COO of SFI Korea from June 2016 to January 2020, with over 5 years of experience in the management and operation of a food services franchise. Additional personnel of Franchisor who have direct experience of at least 1 year in areas of operation of a I Got My Sound Chicken Restaurant will also assist Ms. Kim in the training. We will provide training materials, including without limitation, the Confidential Manuals, marketing and promotion materials, and any other materials that we believe will be beneficial to our franchisees in the training process.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 10

How long is the initial training program for a new I Got My Sound Chicken franchisee?

Accepted Answer

the transferee remodel and/or redecorate the Restaurant premises.

### **J. Training**

- 1. Our new franchisee initial training program consists of approximately one week of instruction by our management team concerning all aspects of the operation and management of the Franchised Business. The initial training includes review and discussion of the Confidential Operations Manual and all aspects of the operation of your business. The training should be scheduled near the time of the completion of the construction of your I Got My Sound Chicken Restaurant and after hiring your key employees, but at least two weeks prior to the opening of your Restaurant. The initial training will be scheduled based on your and our availability. All participants must attend the training together and comply with the schedule set for the training. Our initial training program will be offered at various times, as often as needed during the year, depending on the number of new franchisees entering the System, replacement managers, and other personnel needing training, the number of new Restaurants being opened and the timing of the scheduled openings of the Restaurants.
- 2. The training will take place at our corporate Restaurant located in Fullerton, California, or at another location or locations as we may designate, and will be conducted by our instructors. An Approved Manager (defined in Item 15 below) who may be the Operating Principal (defined in Item 15 below) must attend and successfully complete the training at our sole discretion. Other personnel may attend the initial training subject to the Additional Training Fee for training more than 4 persons (see Item 6 above for details). A person who has successfully completed our new franchisee training program must at all times actively supervise the operation of your I Got My Sound Chicken Restaurant.
- 3. For all required initial training courses, we will provide, at no charge to you, instructors and training materials. You will be responsible for all other expenses which you or your employees incur for the purpose of this training, including the cost of transportation, lodging, meals and wages.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 11

For I Got My Sound Chicken, how long after termination of the Franchise Agreement is the franchisee restricted from unfair competition?

Accepted Answer

I Got My Sound Chicken System, which are unique and proprietary to Franchisor, derive independent economic value from not being generally known to the public and are the subject of Franchisor's efforts and that are reasonable under the circumstances to maintain their secrecy.
- 14.2 During the term of this Agreement, or any extension thereof, Franchisee and each Owner covenants that except as otherwise approved in writing by Franchisor, Franchisee and each Owner shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, or legal Entity (i) divert or attempt to divert any present or prospective I Got My Sound Chicken customer to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the I Got My Sound Chicken Marks and the System, (ii) employ or seek to employ any person who is or has been within the preceding ninety (90) days employed by Franchisor or an affiliate of Franchisor as a supervisorial or managerial employee, or otherwise directly or indirectly induce the person to leave his or her employment, or (ii) own (either beneficially or of record), engage in or render services to, whether as an investor, partner, lender, director, officer, manager, employee, consultant, representative or agent, any Competitive Business, provided, however, the restrictions stated in this Section 14.2 shall not apply to any Owner after two (2) years from the date the Owner ceases to be an officer, director, shareholder member, manager, trustee, owner, general partner, employee or otherwise associated in any capacity with Franchisee. "Entity" shall mean any limited liability company, partnership, trust, association, corporation or other entity, which is not an individual. "Owner" as used herein shall mean each of the individuals listed on Exhibit I and each direct or indirect shareholder, member, general or limited partner, trustee or other equity owner of Franchisee. If Franchisee is an Entity, each Owner and each Owner's spouse shall jointly and severally guarantee Franchisee's payment and performance of its obligations under this Agreement under a Guarantee in the form of Exhibit B. "Competitive Business" shall mean any Restaurant business that prepares, offers and sells Korean-style fried chicken as its primary menu items and any business that looks like, copies, imitates, or operates with similar trade dress or décor to the Franchised Restaurant.

Source: Item 22 — Contracts (FDD page 40)

Question 12

How many times in a year can I Got My Sound Chicken require additional training programs?

Accepted Answer

We can require that you and/or your Manager attend additional and/or refresher training programs, including national and regional conferences, conventions and meetings, as we may reasonably require, to prepare for changes in laws affecting our system and your operations (including AB 1228) and to correct, improve and enhance your operations, the System, and its members at our corporate headquarters, with durations not longer than 4 days and not more than 2 times in any given year. You will be responsible for all travel, living, incidental and other expenses for you and your personnel attending optional or mandatory training programs, seminars or meetings. We may charge a reasonable fee for any training program, conference, convention or other events.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 13

Are proceeds from the sale of coupons included in the gross sales of an I Got My Sound Chicken restaurant?

Accepted Answer

In addition to the foregoing, the following are included within the definition of "Gross Sales" described except as noted below:

- (1) The full value of meals furnished to Franchisee's employees as an incident to their employment, except that the value of any discounts extended to such employees may be credited against Gross Sales during the reporting month in which the meals were furnished for the purpose of determining the amount of Gross Sales upon which the Royalty Fee is due; and

- (2) All proceeds from the sale of coupons, gift certificates or vouchers; provided that at the time such coupons, gifts certificates or vouchers are redeemed the retail price thereof may be credited against Gross Sales during the reporting month in which such coupon, gift certificate or voucher is redeemed for the purpose of determining the amount of Gross Sales upon which the Royalty Fee is due.

Source: Item 22 — Contracts (FDD page 40)

Question 14

What does I Got My Sound Chicken provide at no charge for the initial training courses?

Accepted Answer

ll times actively supervise the operation of your I Got My Sound Chicken Restaurant.
- 3. For all required initial training courses, we will provide, at no charge to you, instructors and training materials. You will be responsible for all other expenses which you or your employees incur for the purpose of this training, including the cost of transportation, lodging, meals and wages. There is a fee for refresher courses, currently rated at \$100 per hour per instructor, plus other expenses incurred including transportation, lodging and meals. The fee will be primarily to compensate the personnel who teach the courses and to defray the expenses of such courses. If you need to replace your Designated Manager, the replacement Designated Manager must attend and complete the supplemental training program to our satisfaction as soon as is practicable.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 15

Who supervises the I Got My Sound Chicken initial training program?

Accepted Answer

7. All aspects of training are integrated. There are no definitive starting and stopping times. The training program will be supervised by our corporate trainer. We can require that you and/or your Manager attend additional and/or refresher training programs, including national and regional conferences, conventions and meetings, as we may reasonably require, to prepare for changes in laws affecting our system and your operations (including AB 1228) and to correct, improve and enhance your operations, the System, and its members at our corporate headquarters, with durations not longer than 4 days and not more than 2 times in any given year. You will be responsible for all travel, living, incidental and other expenses for you and your personnel attending optional or mandatory training programs, seminars or meetings. We may charge a reasonable fee for any training program, conference, convention or other events. Our training is conducted by our operations team, led by Ms. A Rum Kim, who has been our CEO since our formation. Ms. Kim has been the CEO of SFI Korea, our parent disclosed in Item 1 above, from January 2020 to September 2022 and the COO of SFI Korea from June 2016 to January 2020, with over 5 years of experience in the management and operation of a food services franchise. Additional personnel of Franchisor who have direct experience of at least 1 year in areas of operation of a I Got My Sound Chicken Restaurant will also assist Ms. Kim in the training. We will provide training materials, including without limitation, the Confidential Manuals, marketing and promotion materials, and any other materials that we believe will be beneficial to our franchisees in the training process.
![](_page_28_Picture_0.jpeg)

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 20–29)

Question 16

Under what conditions is 'I Got My Sound Chicken' obligated to protect me against infringement claims arising from my use of the marks?

Accepted Answer

If we find in our sole discretion that your use of the Marks was proper as outlined in the terms of the Franchise Agreement, we are obligated to protect you against infringement or unfair competition claims arising out of your use of the Marks or to participate in your defense or indemnify you for the costs you incur in connection with any lawsuit except that we will not be required to reimburse you for your legal fees if we defend you for the claim. We reserve the right to control any litigation related to the Marks, and we have the sole right to decide to pursue or settle any infringement actions related to the Marks. We do not know of either superior prior rights or infringing uses that could materially affect your
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use of the Marks in the state where your Restaurant will be located. You must notify us promptly of any infringement or unauthorized use of the Marks that you may become aware.

Source: Item 13 — Trademarks (FDD pages 31–32)

Question 17

What was the net change in the total number of I Got My Sound Chicken outlets during 2021?

Accepted Answer

| Outlet Type     | Year | Outlets at the    | Outlets at the  | Net Change |
|-----------------|------|-------------------|-----------------|------------|
|                 |      | Start of the Year | End of the Year |            |
| Franchised      | 2021 | 0                 | 0               | 0          |
|                 | 2022 | 0                 | 0               | 0          |
|                 | 2023 | 0                 | 0               | 0          |
| Company or      | 2021 | 0                 | 0               | 0          |
| Affiliate-Owned | 2022 | 0                 | 0               | 0          |
|                 | 2023 | 0                 | 1               | +1         |
| Total Outlets   | 2021 | 0                 | 0               | 0          |
|                 | 2022 | 0                 | 0               | 0          |
|                 | 2023 | 0                 | 1               | +1         |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 38–40)

Question 18

What is the registration date for the 'I Got My Sound Chicken' trademark according to the FDD?

Accepted Answer

| TRADEMARK                | REGISTRATION | REGISTRATION      |
|--------------------------|--------------|-------------------|
|                          | NUMBER       | DATE              |
|                          | 6650717      | February 22, 2022 |
| (I Got My Sound Chicken) |              |                   |

Source: Item 13 — Trademarks (FDD pages 31–32)

I_Got_My_Sound_Chicken 2024 FDD FAQ