What document related to the lease must a Browns Chicken franchisee and lessor sign?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If you lease the premises of the Store, you must obtain Brown's prior consent to the lease terms. The lease must provide that: (1) Brown will receive notice of any default not less than 10 days prior to the commencement of any action to evict you from the Premises; (2) Brown will have, at its option, 10 days after receipt of notice to cure such default and be substituted for you as lessee under the lease; and (3) the lease shall be assigned to Brown, at Brown's option, upon the termination of the Franchise Agreement by Brown in accordance with its terms, or by you without cause as provided in Paragraph A of Section 20 of the Franchise Agreement. You must sign and have the lessor sign the Collateral Assignment of Lease attached to the Franchise Agreement as Rider B.
You must furnish Brown a copy of the signed lease for your Store's premises within 10 days after it is signed.
If you own the real estate on which the Store is located, we have the right to require you to enter into a lease with Brown. Brown will then sublease the Premises back to you upon the same terms and conditions as the lease. So long as you are in compliance with your Franchise Agreement, Brown will continue to sublease you the Premises. If you default under your Franchise Agreement, Brown has the right to terminate the sublease and take possession of the Premises or sublease them to another party.
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, if a franchisee leases the premises for their store, both the franchisee and the lessor are required to sign a Collateral Assignment of Lease. This document is attached to the Franchise Agreement as Rider B.
This requirement ensures that Browns Chicken has certain rights regarding the lease. Specifically, the lease must stipulate that Browns Chicken receives notice of any default at least 10 days before any eviction action begins. This allows Browns Chicken the option to cure the default within 10 days and step in as the lessee. Furthermore, the lease must be assignable to Browns Chicken if the Franchise Agreement is terminated, either by Browns Chicken or by the franchisee without cause, as detailed in Paragraph A of Section 20 of the Franchise Agreement.
This arrangement protects Browns Chicken's interests in maintaining the location for continued operation, even if the franchisee is unable to continue. The franchisee must also provide Browns Chicken with a copy of the signed lease within 10 days of its execution. If the franchisee owns the real estate, Browns Chicken has the right to require the franchisee to enter into a lease with them, which Browns Chicken will then sublease back to the franchisee under the same terms, provided the franchisee complies with the Franchise Agreement. If the franchisee defaults, Browns Chicken can terminate the sublease and take possession or sublease to another party.