Can a Browns Chicken franchisee execute a lease that has been disapproved by Brown?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not execute a lease which has for any reason been disapproved by Brown. Franchisee shall deliver a copy of the signed lease for the Premises to Brown within fifteen (15) days of its execution. Franchisee shall execute a Collateral Assignment of Lease, attached hereto as Rider B, by which Franchisee assigns to Brown all of his right, title and interest as tenant under the lease for the Store premises. The assignment is for collateral purposes and may be exercised only upon a default by Franchisee under his lease or under this Agreement. Brown's approval of Franchisee's lease is conditioned on receipt of the signed Collateral Assignment.
Franchisee's execution of a lease for a site for the Store shall constitute acceptance by Franchisee of such site and location and of the terms of such lease, sublease or purchase.
Brown's approval of the lease or sublease does not constitute a warranty or representation of any kind, express or implied, as to its fairness, suitability or profitability or as to Franchisee's ability to comply with its terms.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee is explicitly prohibited from executing a lease that Browns Chicken has disapproved. The FDD states that the franchisee "shall not execute a lease which has for any reason been disapproved by Brown." This gives Browns Chicken significant control over the location and lease terms of its franchise locations.
Within fifteen days of executing a lease, the franchisee must provide a copy of the signed lease to Browns Chicken. Additionally, the franchisee must execute a Collateral Assignment of Lease, which assigns all rights and interests as a tenant to Browns Chicken. This assignment serves as collateral and can be exercised if the franchisee defaults on the lease or the Franchise Agreement. Browns Chicken's approval of the lease is contingent upon receiving this signed Collateral Assignment.
By executing a lease for a Browns Chicken store site, the franchisee acknowledges acceptance of the site, its location, and the lease terms. However, Browns Chicken's approval of the lease does not provide any warranty or representation regarding its fairness, suitability, profitability, or the franchisee's ability to comply with its terms. This means the franchisee bears the ultimate responsibility for assessing the lease's viability and ensuring they can meet its obligations, even with Browns Chicken's input and approval process.