What are some examples of curable defaults that could lead to termination of a Browns Chicken franchise?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary |
|---|---|---|
| (a) Length of the franchise term | 2A | Approximately 15 years, subject to earlier termination as provided in the Franchise Agreement. |
| (b) Renewal or extension of the term | 2B | If you are in compliance with the Franchise Agreement and give 6 months’ notice of your intent to renew prior to the end of the term, Brown will renew the franchise for a 1 year (minimum) or 5 year term (maximum). |
| Provision | Section in Agreement | Summary |
| (c) Requirements for Franchisee to renew or extend | 2B | Compliance with Franchise Agreement and any other agreements, including leases; remodel and update; sign new franchise agreement; pay $5,000 renewal fee. The renewal agreement may contain materially different terms and conditions than your original contract, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees |
| (d) Termination by Franchisee | 20A | Only if you are in compliance with the Franchise Agreement and Brown fails to cure its own material breach within 30 days of written notice. |
| (e) Termination by Franchisor | None | No specific provision. |
| without cause | ||
| (f) Termination by Franchisor with cause | 20B and 21D | Brown can terminate the Franchise if you default under any agreement; upon termination of the Franchise, any sublease from Brown will terminate, and you may be required to assign your lease to Brown. |
| (g) "Cause" defined – curable defaults | 20B | Upon notice as provided in the Franchise Agreement, the following defaults may be curable: failure to complete training, failure to secure a site or retain or develop it according to Brown's specifications, non-payment of fees (unless repeated), failure to operate the Store in compliance with Brown's standards. For Illinois franchisees, Brown must give you a reasonable time franchise to cure, which need not be more than 30 days. If the time frame is less than 30 days, the causes must be related to health and safety. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–38)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, certain defaults can be cured, potentially avoiding franchise termination. These curable defaults include failing to complete required training, failing to secure a suitable site or develop it according to Browns Chicken's specifications, and non-payment of fees, unless the non-payment is a repeated offense.
For franchisees in Illinois, Browns Chicken must provide a reasonable time frame to cure the default. While this cure period need not exceed 30 days, if the timeframe is shorter than 30 days, the reasons for termination must be related to health and safety concerns. This suggests that Browns Chicken franchisees outside of Illinois may face shorter cure periods for defaults, regardless of whether the cause is related to health and safety.
It is important to note that even if a default is initially curable, repeated instances of the same default, even if cured each time, can become grounds for non-curable termination. This highlights the importance of consistent compliance with the franchise agreement to maintain the Browns Chicken franchise. Prospective franchisees should carefully review Section 20B of the Franchise Agreement, as referenced in Item 17, to fully understand their obligations and the specific conditions under which a default can lead to termination.