What is the dependency between Wilkens Foodservice and Browns Chicken considering other suppliers?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
any supplier which is no longer approved by Brown.
In order to obtain reduced margins, Brown has approved Wilkens Foodservice as the single distributor for all food, beverage, and dry goods products, other than bakery items. You must purchase all those items from Wilkens Foodservice. Wilkens Foodservice does not pay Brown
any rebates or other payments based on franchisee purchases. The contract with Wilkens Foodservice does not have a term. Upon termination of the contract with Wilkens Foodservice, Brown may approve one or more other distributors. Brown's approval may be conditioned on requirements relating to the frequency of delivery, standards of service, including prompt attention to complaints, or other criteria, and concentration of purchases, as set forth above, and may be temporary, pending a further evaluation of such distributor or other supplier by Brown.
Other than under our arrangement with Pepsi and Dr. Pepper/Seven Up, Inc. we do not currently derive any revenue or other material consideration from your purchases or leases from designated or approved suppliers, although we reserve the right to do so in the future.
There are currently 2 purchasing arrangements for franchisees. One is with Pepsi, which is an approved fountain beverage product supplier. Under the Pepsi agreement, you will have the right to purchase Pepsi fountain syrups from Wilkens at then-current published chain account prices, which prices are subject to change from time to time. The Pepsi agreement provides that Pepsi will pay a rebate into the Brown Advertising Fund based on Franchisees' purchases of Pepsi products. During the fiscal year 2024, Pepsi paid Brown rebates totaling $1,637 which was retained by Brown in its general operating budget.
A second purchasing arrangement is with Dr. Pepper/Seven Up, Inc., which is an approved fountain beverage product supplier. During the fiscal year 2024, Dr. Pepper/Snapple paid Brown rebates totaling $308.25, which was deposited into the Brown Advertising Fund.
If you propose to purchase and use in the operation of the Store, or to offer for sale at or from the Store any type or brand of product which is not then approved by Brown as meeting its specifications and standards, or to purchase any product from a supplier that is not then an approved supplier, you must first notify Brown. If any product is offered by Wilkens, then during the 3 year contract term described above, we will not consider any other suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees must purchase all food, beverage, and dry goods (excluding bakery items) from Wilkens Foodservice to obtain reduced margins. Browns Chicken has designated Wilkens Foodservice as the single distributor for these products. The agreement between Browns Chicken and Wilkens Foodservice does not have a specified term, but Browns Chicken may approve other distributors if the contract with Wilkens Foodservice is terminated.
Browns Chicken may consider a franchisee's request to purchase products from other suppliers if Wilkens Foodservice does not offer those products. To do so, the franchisee must notify Browns Chicken and submit the necessary information, specifications, and samples for evaluation. Browns Chicken will then determine whether the proposed product or supplier meets its standards, a process that can take between 2 to 6 months depending on various factors.
Browns Chicken does not receive rebates or other payments from Wilkens Foodservice based on franchisee purchases. However, Browns Chicken does receive rebates from Pepsi and Dr. Pepper/Seven Up, Inc. based on franchisee purchases of their fountain syrups. These rebates are deposited into the Brown Advertising Fund or retained in Browns Chicken's general operating budget. Browns Chicken does not provide any material benefits to a franchisee based on the franchisee's purchase of particular products or services or use of particular suppliers.