Is a Browns Chicken franchisee allowed to change their banking relationships without approval?

According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee is not allowed to make changes to their banking relationships without prior written approval from Browns Chicken. This includes changes to the account number of their general operating account or changing banks altogether.

This requirement allows Browns Chicken to maintain control over financial transactions, particularly regarding royalty fees and advertising fund contributions. Browns Chicken utilizes an electronic bank draft system, outlined in Rider C, to collect these payments. If a franchisee fails to submit required reports, Browns Chicken can withdraw an estimated amount based on the average sales of the last ten reported weeks, with an additional 10% added if the franchisee fails to report sales for two consecutive weeks.

Furthermore, if an electronic bank draft is declined due to insufficient funds, the franchisee must pay Browns Chicken a $50.00 processing fee and immediately resolve the issue to ensure future drafts are honored. Browns Chicken also reserves the right to withdraw amounts due for miscellaneous invoices, such as equipment or uniform purchases, if they are over 30 days past due. This level of financial oversight is common in franchising, as it protects the franchisor's revenue stream and ensures brand consistency.

For a prospective Browns Chicken franchisee, this means they must obtain written permission before changing banks or account numbers. This requirement is in place to ensure Browns Chicken can reliably collect fees and manage the financial aspects of the franchise agreement. Failure to comply with this provision could lead to a breach of the franchise agreement and potential penalties.