What is the deadline for Browns Chicken to exercise its option to purchase the assets of a Browns Chicken franchise after expiration or termination?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) If this Agreement expires (without renewal) or is terminated by Brown in accordance with its provisions or by Franchisee without cause, then Brown shall have the option, exercisable by giving written notice thereof within sixty (60) days from the date of such expiration or termination, to purchase from Franchisee any or all the tangible assets (including, without limitation, inventory of saleable products, equipment, fixtures, furniture, signs, cash registers, modems, fax machines, computers, leasehold improvements and any other assets of the Store owned by Franchisee, but excluding any unamortized portion of the initial franchise fee, cash, goodwill, short-term investments and accounts receivable) of the Store (collectively, the "Purchased Assets") and to an assignment of Franchisee's lease for (a) the premises of the Store (or, if an assignment is prohibited, a sublease for the full remaining term and on the same terms and conditions as Franchisee's lease) and (b) any other tangible assets used in connection with the Store. Brown may exclude from the assets purchased any items that Brown determines are not reasonably necessary (in function or quality) to the Store's operation or that Brown has not approved as meeting its standards for BROWN's Stores, and the purchase price will reflect these exclusions.Brown shall have the unrestricted right to assign this option to
purchase and assignment of leases separate and apart from the remainder of this Agreement.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken has the option to purchase a franchisee's tangible assets if the franchise agreement expires without renewal, is terminated by Browns Chicken according to its provisions, or is terminated by the franchisee without cause. To exercise this option, Browns Chicken must provide written notice within sixty (60) days from the date of expiration or termination.
This provision allows Browns Chicken to maintain control over the location and assets of a Browns Chicken franchise, ensuring continued operation under the brand if desired. The assets Browns Chicken may purchase include inventory, equipment, fixtures, furniture, signs, cash registers, modems, fax machines, computers, and leasehold improvements. However, the purchase excludes items like the unamortized portion of the initial franchise fee, cash, goodwill, short-term investments, and accounts receivable.
Browns Chicken also has the right to exclude assets it deems unnecessary for the store's operation or that do not meet its standards, which will be reflected in the purchase price. Furthermore, Browns Chicken can assign this purchase option to another party. This clause is important for prospective franchisees to understand, as it outlines the conditions under which Browns Chicken can buy back the franchise's assets and the timeframe within which they must act.