Besides monetary penalties, what other remedies does Browns Chicken retain if a franchisee defaults?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
A default under this Agreement shall also constitute a default under any and all other agreements entered into between Brown and Franchisee (or related entities, of which any one or more parties, whether individual, corporate or otherwise, is a party to or guarantor of said other agreement), with the right to terminate the other agreement(s) in accordance with the provisions of those agreement(s).
In the event Franchisee shall fail to secure any license or permit required for the operation of the Store, Brown, at its option and in addition to its other rights and remedies hereunder, may obtain such license or permit on behalf of Franchisee and Franchisee shall fully cooperate with Brown in its efforts to obtain such license or permit on behalf of Franchisee and shall pay to Brown, on demand, all costs and charges incurred by Brown.
Upon termination or expiration of the Franchise, Franchisee agrees that upon termination or expiration of the Franchise, it will immediately cease to use any Confidential Information of Brown disclosed to Franchisee pursuant to this Agreement in any business or otherwise and will return to Brown all copies of the Operating Manual and other confidential materials which have been lent to it by Brown.
Upon termination or expiration of the Franchise, unless the Franchise is terminated by Franchisee for cause, the sublease from Brown to the Franchisee, if any, for the Premises of the Store, shall automatically terminate, or if Franchisee is the lessee of the Premises, Brown shall have the right to require Franchisee to assign its lease for the Premises to Brown or Brown's designee.
If the Franchise expires, is not renewed or is terminated prior to its expiration for any reason, Franchisee agrees that for a period of eighteen (18) months commencing on the effective
date of expiration or termination of the Franchise, or the date on which Franchisee ceases to conduct the business conducted pursuant to this Agreement, whichever is later, it will not:
- (1) engage, directly or indirectly, as an owner (except of publicly-traded securities), partner, director, officer, employee, consultant, lessor, lender, representative or agent, or in any other capacity in a retail food service business featuring cooked chicken, pasta, or sandwiches, and which is located within five (5) miles of the Store or any BROWN's Store, or in any entity which is granting franchises or licenses for retail food service businesses featu
"Brown's Chicken, LLC or its appointed representatives have the right to enter the leased premises to make any modification necessary to protect the Trademarks of Brown's Chicken, LLC, or to cure any default under the Franchise Agreement or the Lease."
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, in addition to monetary penalties for non-compliance, Browns Chicken retains several other remedies if a franchisee defaults. These remedies include the right to terminate other agreements between Browns Chicken and the franchisee, especially if the default occurs under those agreements. Browns Chicken can also obtain necessary licenses or permits on behalf of the franchisee if the franchisee fails to do so, with the franchisee responsible for all associated costs.
Upon termination or expiration of the franchise agreement, Browns Chicken has specific rights and the franchisee has corresponding obligations. The franchisee must immediately cease using any confidential information and return all copies of the operating manual and other confidential materials. Unless the franchise is terminated by the franchisee for cause, any sublease from Browns Chicken to the franchisee will automatically terminate, or Browns Chicken has the right to require the franchisee to assign their lease for the premises to Browns Chicken or its designee.
Furthermore, the franchisee is restricted from engaging in a similar retail food service business featuring cooked chicken, pasta, or sandwiches within five miles of the Browns Chicken store or any other Browns Chicken store for a period of 18 months following the termination or expiration of the franchise. Browns Chicken also has the right to enter the leased premises to make modifications to protect its trademarks or to cure any default under the Franchise Agreement or the Lease. These measures ensure Browns Chicken can protect its brand and operational standards even after a franchise agreement ends.