Can a Browns Chicken franchisee lease, sublease from Brown, or purchase the premises for the store?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee may lease, sublease from Brown, or purchase the Premises for the Store. In the event Franchisee leases the Premises, the lease for the Premises shall provide that: (1) Brown shall receive notice from the landlord of any default by Franchisee not less than ten (10) days prior to the commencement of any action to evict Franchisee from the Premises; (2) Brown shall have, at its option, ten (10) days after receipt of notice to cure such default and be substituted for Franchisee as lessee under the lease; and (3) the premises shall be used only for a BROWN Store. The lease for the Premises shall provide further for its assignment to Brown, at Brown's option, upon the termination of this Agreement by Brown in accordance with the terms of this Agreement, or by Franchisee without cause as provided in Paragraph A of Section 20 of this Agreement. The lease shall contain substantially the following provisions:
"Anything contained in this lease to the contrary notwithstanding, Lessor agrees that, without its consent, this lease and the right, title and interest of the Lessee thereunder, may be assigned by the Lessee to Brown's Chicken, LLC, an Illinois limited liability company, or its designee, provided that said Brown's Chicken, LLC or its designee shall execute such documents evidencing its agreement to thereafter keep and perform, or cause to be kept or performed, all of the obligations of the Lessee arising under this lease from and after the time of such assignment."
"Lessor agrees that Lessor shall, upon written request of Brown's Chicken, LLC, disclose to said limited liability company, all reports, information or data in Lessor's possession with respect to sales made in, upon or from the leased premises."
"Lessor shall give written notice to Brown's Chicken, LLC, an Illinois limited liability company (concurrently with the giving of such notice to Lessee), of any default by Lessee under the lease and the said Brown's Chicken, LLC shall have, after the expiration of the period during which the Lessee may cure such default, an additional thirty (30) days to cure, at its sole option, any such default."
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee has multiple options regarding the premises for their store. Specifically, the franchisee may choose to lease the premises, sublease it from Browns Chicken, or purchase the premises outright.
If the franchisee opts to lease the premises, the lease agreement must include certain provisions that protect Browns Chicken's interests. These provisions include requiring the landlord to notify Browns Chicken of any franchisee default at least ten days before starting eviction proceedings, granting Browns Chicken the option to cure the default within ten days of receiving notice and substitute itself as the lessee, and restricting the premises' use solely to a Browns Chicken store. The lease must also allow for its assignment to Browns Chicken if Browns Chicken terminates the Franchise Agreement due to the franchisee's breach or if the franchisee terminates the agreement without cause.
Furthermore, Browns Chicken retains significant control over the lease terms. The landlord must disclose sales information to Browns Chicken upon request and provide Browns Chicken with an additional 30 days to cure any default after the franchisee's cure period expires. The landlord is also prohibited from modifying or terminating the lease or consenting to its assignment by the franchisee without Browns Chicken's prior written consent. Browns Chicken also has the right to enter the leased premises to make necessary modifications to protect its trademarks or cure any default under the Franchise Agreement or the lease. The franchisee must also provide Browns Chicken with a copy of the signed lease within 15 days of execution and execute a Collateral Assignment of Lease, assigning their rights as tenant to Browns Chicken as collateral, which can be exercised upon default.