Does Browns Chicken have approval rights over the manager appointed after the death or disability of a franchisee?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, the executor, administrator, conservator, guardian or other personal representative of such person shall appoint a manager to operate the Store within a reasonable time, not to exceed thirty (30) days from the date of death or permanent disability of such person.
The appointment of such manager shall be subject to the prior written approval of Brown and, if requested by Brown, such manager shall attend and complete Brown's training program for franchisees.
Such manager shall execute Brown's then-current form of Confidentiality and Non-Competition Agreement.
If in the judgment of Brown, the Store is not being managed properly after the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, Brown shall have the right to appoint a manager for the Store to manage the Store for up to thirty (30) days.
During that period, Franchisee shall either cause its manager to attend additional training, or appoint another manager.
If Franchisee fails to do so, Brown may terminate this Agreement.
Brown shall periodically discuss the status with the Franchisee or the Franchisee's representative during such period of interim management.
All funds from the operation of the Store during the management by Brown's appointed manager will be kept in a separate bank account, and all expenses of the Store including compensation, other costs, and travel and living expenses of Franchisee's manager will be charged to this account.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken does have approval rights over the manager appointed after the death or permanent disability of a franchisee. Specifically, upon the death or permanent disability of the franchisee (or the owner of a controlling interest), the representative of the deceased or disabled person must appoint a manager to operate the store within 30 days. However, this appointment is subject to Browns Chicken's prior written approval.
Furthermore, Browns Chicken can require the appointed manager to attend and complete Browns Chicken's training program for franchisees. The manager must also execute Browns Chicken's current Confidentiality and Non-Competition Agreement. This ensures that the manager is properly trained and bound by the same confidentiality and non-competition obligations as the original franchisee.
If Browns Chicken believes the store is not being managed properly after the death or disability of the franchisee, Browns Chicken has the right to appoint its own manager for up to 30 days. During this period, the franchisee's representative must either have their manager attend additional training or appoint a new manager. Failure to do so could result in Browns Chicken terminating the franchise agreement. All funds during the management by Browns Chicken's appointed manager will be kept in a separate bank account, and all store expenses, including the compensation, costs, and travel expenses of the franchisee's manager, will be charged to this account.
This provision protects Browns Chicken's brand standards and ensures the continued operation of the franchise according to its established methods, even in unforeseen circumstances. It also places a responsibility on the franchisee's estate to act quickly and find a suitable manager acceptable to Browns Chicken, or risk intervention by the franchisor and potential termination of the franchise agreement.