For Browns Chicken, what constitutes abandonment of the store that would trigger liquidated damages?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
the right pending the closing of such purchase to appoint a manager to maintain the operation of the Store in accordance with the relevant provisions of Paragraph 10.I. hereof. Alternatively, Brown may require Franchisee to close the Store during such time period without removing any assets of the Store.
H. Liquidated Damages for Specific Events of Breach.
In the event Franchisee (i) abandons the Store, which for purposes of this Section is failing to open or operate the Store for more than three (3) consecutive days, or (ii) transfers an interest in the Store or the ownership of Franchisee or of the assets of Franchisee or the Store (or any interest therein) without fully complying with Paragraph 22.C. of this Agreement, whether or not Brown terminates this Agreement, Brow
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, abandoning the store, which triggers liquidated damages, is defined as failing to open or operate the store for more than three consecutive days. If a franchisee abandons the store in this manner, Browns Chicken has the right to impose liquidated damages of $10,000.00.
This liquidated damages provision is in addition to any other rights and remedies Browns Chicken may have under the franchise agreement. The agreement specifies that these liquidated damages are not considered a penalty or forfeiture. Instead, they are designed to provide reasonable compensation to Browns Chicken in situations where calculating the exact amount of actual damages would be difficult.
This clause is important for prospective franchisees to understand, as it clarifies the specific actions that constitute abandonment and the financial consequences that follow. Franchisees should be aware of the operational requirements to avoid triggering this clause, ensuring continuous operation of their Browns Chicken store, or face a $10,000.00 penalty.