In the context of the Browns Chicken Collateral Assignment, what does the Lessor confirm their consent to?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| 5. | The parties agree that this Collateral Assignment shall be effective and binding upon Assignor upon Assignor's execution, whether or not Lessor executes its consent below. |
|---|---|
| IN WITNESS WHEREOF, | the parties hereto have set their hands and seals this day |
| of, 20 | Assignor: By: Title: |
| Lessor's Consent | |
| assignment of the Lease. | The undersigned, ("Lessor"), as Lessor of the above-described Premises, hereby confirms its consent to the Collateral Assignment. Lessor acknowledges that upon a default by Assignor under the Lease or under the franchise agreement for a BROWN's Store to be operated at the Premises, between Assignee and Assignor (the "Franchise Agreement"), or in the event of a default by Assignor under any document or instrument securing said Franchise Agreement, Assignee shall have the right to take an Lessor: By: Title: |
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the Lessor confirms their consent to the Collateral Assignment of the lease. This confirmation acknowledges that if the franchisee defaults on the lease or the franchise agreement, or any document securing the franchise agreement, Browns Chicken has the right to take assignment of the lease.
This agreement is crucial for Browns Chicken as it provides a mechanism to secure the location of the franchise in case of franchisee default. By having the Lessor's consent to the collateral assignment, Browns Chicken can step in and take over the lease, ensuring the continuity of the Browns Chicken business at that location. This protects Browns Chicken's brand presence and market share.
For a prospective Browns Chicken franchisee, this means that the lease agreement for their store location will include a Collateral Assignment clause, requiring the Lessor's consent. This clause allows Browns Chicken to assume the lease if the franchisee fails to meet their obligations. While this may seem like a standard legal procedure, it highlights the importance of franchisees maintaining compliance with both the lease terms and the franchise agreement to avoid the risk of Browns Chicken exercising its rights under the Collateral Assignment.