When is the balance of the Browns Chicken initial franchise fee due?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 5 INITIAL FEES
Except as described below, Brown charges an initial franchise fee of $25,000, $15,000 of which is payable upon execution of the Preliminary Agreement. The balance is due and payable immediately prior to the opening of the Store.
Preliminary Agreement. You may, but are not required to, sign a Preliminary Agreement (attached as Exhibit E) and pay a $15,000 deposit for a Brown's franchise. You would sign it if you do not have a location for a Brown's Store and you want to locate your site prior to the execution of a Franchise Agreement. The Preliminary Agreement gives you a period of 60 days in which to locate a site. If a site is not located and approved within the 60 days, Brown will refund all but $3,000 of the deposit. If you locate a site and sign a Franchise Agreement, the $15,000 deposit will be applied toward the initial franchise fee. If you locate a site and it is approved by Brown within the 60 days but you fail to sign a Franchise Agreement within 10 days of the approval, Brown may terminate the Preliminary Agreement and you will not be entitled to any refund of the $15,000 deposit.
Video Gaming Rider. There is no initial franchise fee charged for the Video Gaming Rider.
The initial franchise fee is fully earned by Brown when paid and is non-refundable, with 2 exceptions. A portion of the deposit is refundable as described in the paragraph above. The second exception is if Brown elects to terminate the franchise due to your failure to complete satisfactorily the training program. In that event, Brown will refund to you any payments made of the initial franchise fee, less the expenses Brown incurred in connection with granting you the franchise and training you and your designees.
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the initial franchise fee is $25,000. A portion of $15,000 is payable upon the execution of the Preliminary Agreement. The remaining balance of the initial franchise fee is due immediately prior to the opening of the Browns Chicken store.
For a prospective franchisee, this means that they will need to have the remaining funds available as they approach their store's opening date. This is a crucial detail for financial planning, as it dictates the timing of a significant payment. It is common practice in the franchise industry to require the initial franchise fee to be paid in full before the store opens, as this secures the franchisee's rights and provides the franchisor with capital for support and training.
Browns Chicken's FDD also mentions a Preliminary Agreement, which allows prospective franchisees to secure a territory and begin site selection before fully committing to a Franchise Agreement. If a franchisee signs a Preliminary Agreement, $15,000 of the initial franchise fee is due. If the franchisee does not locate a site within 60 days, Browns Chicken will refund all but $3,000 of the deposit. If a site is located and approved but the franchisee fails to sign a Franchise Agreement within 10 days of the approval, Browns Chicken may terminate the Preliminary Agreement, and the franchisee will not be entitled to any refund of the $15,000 deposit.
It is important to note that the initial franchise fee is generally non-refundable once paid, with a couple of exceptions. A portion of the deposit is refundable as described in the Preliminary Agreement. The second exception is if Browns Chicken elects to terminate the franchise due to the franchisee's failure to complete the training program satisfactorily. In that event, Browns Chicken will refund any payments made of the initial franchise fee, less the expenses Browns Chicken incurred in connection with granting the franchise and training the franchisee and their designees.