Can Brown assign the Browns Chicken Franchise Agreement to another party?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is binding upon the parties hereto and their respective heirs, assigns and successors in interest and shall not be modified except by written agreement signed by both Franchisee and Brown.
Franchisee shall not assign or in any manner transfer the lease or sublease, as the case may be, for the Premises or any interest therein (except in connection with an assignment or transfer of the Franchise or ownership of Franchisee approved by Brown as provided in Section 22), or further sublet the Premises or any part or parts thereof, nor permit occupancy by anyone with, through, or under Franchisee.
In the event Franchisee shall request consent to a transfer of this Agreement or a controlling interest in Franchisee and for any reason such transfer is not completed or consummated, Brown shall be entitled to reimbursement of its reasonable expenses incurred in connection with such proposed transfer in the manner and in accordance with the procedures set forth herein, including, without limitation, expenses related to investigating, processing and training any proposed transferee.
Upon the death or permanent disability of Franchisee, or, if Franchisee is a corporation or partnership, upon the death or permanent disability of the owner of a controlling interest in Franchisee, the executor, administrator, conservator, guardians or other personal representative of such person shall transfer his interest in this Agreement and the Franchise, or such interest in Franchisee, to a third party approved by Brown.
The Franchise may be assigned to a partnership or corporation in which Franchisee owns and controls not less than fifty-one percent (51%) of the general partnership interest or the equity and voting power.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the Franchise Agreement is binding upon both parties and their respective heirs, assigns, and successors. This indicates that Browns Chicken can assign the Franchise Agreement to another party.
However, the document also states that the franchisee cannot assign or transfer the lease or sublease for the premises without Browns Chicken's prior approval. Furthermore, if the franchisee seeks to transfer the agreement and the transfer is not completed, Browns Chicken is entitled to reimbursement for reasonable expenses incurred during the process.
In the event of the franchisee's death or permanent disability, their representative must transfer the interest in the Franchise Agreement to a third party approved by Browns Chicken. Browns Chicken also requires that if the franchise is assigned to a partnership or corporation, the franchisee must maintain ownership and control of at least 51% of the partnership interest, and all partners or shareholders must agree to be bound by the provisions of the agreement.