In the context of transferring a Browns Chicken franchise after death or disability, what constitutes a 'reasonable time'?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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, in the event of the death or permanent disability of a franchisee, their representative has a 'reasonable time' to transfer the franchise interest, which is defined as no more than six months from the date of death or permanent disability. Failure to complete the transfer within this timeframe constitutes a breach of the franchise agreement.
During this period, the representative must also appoint a manager to operate the Browns Chicken store within 30 days of the death or disability. This manager is subject to Browns Chicken's approval and may be required to complete the franchisor's training program. The manager must also sign a Confidentiality and Non-Competition Agreement.
If Browns Chicken believes the store is not being managed properly, they reserve the right to appoint their own manager for up to 30 days. During this time, the franchisee's representative must either have their manager undergo additional training or appoint a new manager. Failure to comply may result in the termination of the franchise agreement. Funds generated during Browns Chicken's management will be kept in a separate account, covering all store expenses and the compensation for the franchisee's manager.