factual

What constitutes a breach of the Browns Chicken franchise agreement regarding transfer after death or disability?

Browns_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

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. Such disposition of this Agreement and the Franchise, or such interest in Franchisee (including, without limitation, transfer by bequest or inheritance), shall be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability and shall be subject to all the terms and conditions applicable to transfers contained in this Section 22. Failure to so dispose of this Agreement and the Franchise, or such interest in Franchisee, within said period of time shall constitute a breach of this Agreement. Franchisee agrees to provide Brown with monthly written reports of progress toward effecting the transfer, from the date of death or disability until the transfer is completed.

  • (2) Operation After Death or Permanent Disability. Upon the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, the executor, administrator, conservator, guardian or other personal representative of such person shall appoint a manager to operate the Store within a reasonable time, not to exceed thirty (30) days from the date of death or permanent disability of such person. The appointment of such manager shall be subject to the prior written approval of Brown and, if requested by Brown, such manager shall attend and complete Brown's training program for franchisees. Such manager shall execute Brown's then-current form of Confidentiality and Non-Competition Agreement. If in the judgment of Brown, the Store is not being managed properly after the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, Brown shall have the right to appoint a manager for the Store to manage the Store for up to thirty (30) days. During that period, Franchisee shall either cause its manager to attend additional training, or appoint another manager. If Franchisee fails to do so, Brown may terminate this Agreement. Brown shall periodically discuss the status with the Franchisee or the Franchisee's representative during such period of interim management. All funds from the operation of the Store during the management by Brown's appointed manager will be kept in a separate bank account, and all expenses of the Store including compensation, other costs, and travel and living expenses of Franchisee's manager will be charged to this account.

Source: Item 22 — Contracts (FDD page 43)

What This Means (2025 FDD)

According to Browns Chicken's 2025 Franchise Disclosure Document, a breach of the franchise agreement related to transfer after death or permanent disability occurs if the disposition of the agreement and franchise interest is not completed within a reasonable time, specifically not exceeding six months from the date of death or permanent disability.

Additionally, the franchisee is obligated to provide Browns Chicken with monthly written reports detailing the progress toward completing the transfer, starting from the date of death or disability until the transfer is finalized. Failure to provide these reports would also constitute a breach of the agreement.

Furthermore, upon the death or permanent disability of the franchisee (or the owner of a controlling interest), an executor or representative must appoint a manager to operate the store within 30 days of the event. This manager is subject to Browns Chicken's approval and may be required to complete their training program and sign a Confidentiality and Non-Competition Agreement. If Browns Chicken deems the store is not being managed properly, they have the right to appoint their own manager for up to 30 days, during which the franchisee must either provide additional training to their manager or appoint a new one. Failure to do so can result in termination of the agreement. Finally, if an approved transfer is not effected as provided in Section 14 of the Franchise Agreement, this will also constitute a breach of contract.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.