When does the Collateral Assignment become effective and binding on the Assignor for the Browns Chicken franchise?

According to Browns Chicken's 2025 Franchise Disclosure Document, the franchisee must execute a Collateral Assignment of Lease, which assigns all rights, title, and interest as a tenant under the lease for the store premises to Browns Chicken. This assignment serves as collateral and can be exercised if the franchisee defaults under the lease or the Franchise Agreement. Browns Chicken's approval of the franchisee's lease is contingent upon receiving the signed Collateral Assignment.

The Collateral Assignment is for collateral purposes only. Browns Chicken has no liability or obligation unless they take possession of the premises and expressly agree in writing to assume the obligations of the franchisee under the lease. The franchisee (Assignor) confirms they have the authority to assign the lease and have not previously assigned or transferred any interest in it.

Upon a default by the franchisee (Assignor) under the lease or the Franchise Agreement, or if the Franchise Agreement expires without renewal, Browns Chicken has the right to take possession of the premises and expel the franchisee. In such an event, the franchisee loses all rights, title, and interest in the lease. The franchisee also agrees not to surrender, terminate, amend, or modify the lease without Browns Chicken's prior written consent. The franchisee must exercise all options to extend or renew the lease at least 30 days before the option deadline, unless Browns Chicken agrees otherwise in writing; failure to do so allows Browns Chicken to act as the franchisee's attorney-in-fact to exercise such options.