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How much does Big Chicken cost?
Initial Investment Range
$681,500 to $1,535,500
Franchise Fee
$40,000
We offer franchisees the right to operate a fast-casual restaurant under the Big Chicken trademarks and business systems featuring chicken sandwiches and chicken tenders with side dishes, salads, ice cream, and other desserts.
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Big Chicken April 30, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor, BC Licensing LLC (BC Licensing), has a significant negative equity (a member's deficit of $3,660,139 as of year-end 2024), as shown in its audited financial statements. While its net income turned positive in 2024, this was driven by franchise sales, not sustained royalties. This negative equity raises questions about its long-term ability to support franchisees and grow the brand, a risk noted by several state regulators who require fee deferrals.
Potential Mitigations
- A franchise accountant should thoroughly analyze the financial statements, including the footnotes and cash flow statements, to assess the franchisor's viability.
- Discuss the company's financial health and capitalization plans directly with the franchisor's management, with questions prepared by your financial advisor.
- Your attorney should review any state-required financial assurances, like fee deferrals or bonds, to understand the protections they offer.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a very high rate of terminations and other cessations. In 2024 alone, there were 9 terminations. Given the system started 2024 with only 10 franchised units, this represents an extremely high turnover rate. Such a significant number of departures, which includes non-compliance terminations and abandoned franchises, could indicate systemic issues, franchisee dissatisfaction, or potential unprofitability, posing a substantial risk to your investment.
Potential Mitigations
- It is critical to contact a significant number of the former franchisees listed in Exhibit L to understand why they left the system.
- Your franchise attorney can help you formulate specific, probing questions for these former franchisees.
- Discussing these turnover figures with your accountant will help assess the potential financial instability they may signal.
Rapid System Growth
High Risk
Explanation
The system is growing very quickly, expanding from 3 to 22 franchised outlets in just two years. While growth can be positive, such rapid expansion, especially for a young franchisor with a history of financial weakness, may strain its ability to provide adequate site selection support, training, and ongoing operational assistance to all franchisees. You could find that the support infrastructure has not kept pace with sales.
Potential Mitigations
- Inquiring with both new and established franchisees about the quality and timeliness of the franchisor's support is essential.
- A business advisor can help you question the franchisor about its plans and capacity to scale its support systems.
- Your accountant should review the franchisor's financial statements to determine if sufficient funds are allocated to support this rapid growth.
New/Unproven Franchise System
High Risk
Explanation
BC Licensing was formed in February 2020 and began franchising in April 2021. As a young system, it lacks a long-term track record of success and franchisee profitability. This newness, combined with its history of financial losses and high franchisee turnover, presents a greater risk than investing in a more mature, established franchise system. The business model may not yet be fully proven across various market conditions.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the backgrounds of the management team listed in Item 2.
- Speaking with the earliest franchisees from the list in Item 20 is crucial to understand the system's evolution and challenges.
- Your accountant should assess the franchisor's capitalization to determine if it has the resources to sustain the system through its early growth stages.
Possible Fad Business
Medium Risk
Explanation
The business concept is centered around chicken sandwiches, a highly popular but also intensely competitive market segment. There is a risk that extreme market saturation or shifts in consumer taste could affect long-term viability. You should assess whether the brand's connection to a public figure, Shaquille O'Neal, provides a sustainable competitive advantage or if the concept is vulnerable to becoming a fad once the novelty diminishes.
Potential Mitigations
- A business advisor can help you research the long-term market trends for fast-casual chicken concepts and assess local competition.
- Evaluating the franchisor's plans for menu innovation and brand evolution as described in Item 11 is important for gauging long-term strategy.
- Consider the business's appeal independent of the celebrity endorsement with your marketing advisor.
Inexperienced Management
Medium Risk
Explanation
While some members of the management team have prior experience with other franchise brands like Firehouse Subs, their collective experience in managing this specific brand, Big Chicken, is relatively short given the company was formed in 2020. A prospective franchisee could find that the systems and support structures are still developing. You should evaluate if the team's combined expertise is sufficient to navigate the challenges of a young, rapidly growing system.
Potential Mitigations
- A business advisor should help you carefully review the specific roles and franchising experience of each executive listed in Item 2.
- Asking current franchisees about their direct experiences with the management team's responsiveness and strategic direction is essential.
- Inquire with the franchisor about how their past experiences are being applied to develop robust systems for Big Chicken.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Private equity ownership can sometimes lead to a focus on short-term profitability over the long-term health of franchisees. This might manifest as reduced support, increased fees, or a quick sale of the franchise system. It is important to understand the ownership structure of any franchisor you consider.
Potential Mitigations
- Investigating the ownership structure of a franchisor is a key due diligence step a business advisor can assist with.
- If a private equity firm is involved, researching its reputation and track record with other franchise brands is advisable.
- Your attorney should review any clauses in the franchise agreement related to the sale or transfer of the entire franchise system.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The franchisor, BC Licensing, is a wholly-owned subsidiary of BCIP LLC, which is its Parent Company. The FDD includes the financial statements for the franchisor entity itself but not for the Parent. While the franchisor has negative equity, the financial strength of the Parent is not disclosed, and there is no guarantee from the Parent for the franchisor's obligations. This limits your ability to fully assess the financial stability of the entire organization.
Potential Mitigations
- Your accountant should review the franchisor's financials and note the absence of a parental guarantee or parent financials.
- Understanding the relationship between a subsidiary franchisor and its parent is a topic to discuss with your franchise attorney.
- Inquire if the parent company is willing to provide a guarantee for the franchisor's obligations, which your attorney can help facilitate.
Predecessor History Issues
Low Risk
Explanation
The FDD package does not indicate that BC Licensing acquired the system from a predecessor. When a franchisor has a predecessor, it is important to review the predecessor's history, including any past litigation, bankruptcies, or franchisee turnover, as these can indicate underlying issues with the system that may have been inherited by the current franchisor.
Potential Mitigations
- Your attorney should always verify whether a franchisor has a predecessor and analyze the history disclosed in Items 1, 3, and 4.
- If a predecessor exists, due diligence should include researching the predecessor's reputation and speaking with franchisees who operated under them.
- A business advisor can help assess if the current franchisor has resolved any issues inherited from a predecessor.
Pattern of Litigation
Medium Risk
Explanation
Item 3 discloses one pending lawsuit initiated by BC Licensing against a former franchisee for breach of contract. Item 4 discloses a bankruptcy for Roti Restaurants, LLC, a former employer of a current Big Chicken executive. While not an excessive pattern of litigation against the franchisor, the bankruptcy of an executive's former company warrants attention as it may reflect on management's prior business environment.
Potential Mitigations
- A franchise attorney should review the details of any disclosed litigation to understand its potential implications for the franchise system.
- Discuss the nature of the disclosed litigation with current franchisees to get their perspective.
- Your business advisor can help you assess any patterns in litigation, such as the reasons the franchisor sues franchisees.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems