How does a Browns Chicken franchisee pay the royalty fee on gross sales from Video Gaming?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that its revenues from Video Gaming shall be considered to be "Gross Sales" as that term is defined in Section 19.B. of the Franchise Agreement.
Franchisee shall pay Franchisor a royalty fee of ten percent (10%) of Franchisee's gross sales from Video Gaming at Franchisee's Store, in the same manner and at the same time that Franchisee pays the royalty fee required under Section 19.A. of the Franchise Agreement.
Franchisee shall pay to the Advertising Fund, four percent (4%) of Franchisee's gross sales from Video Gaming at Franchisee's Store, in the same manner and at the same time that Franchisee pays the Advertising Fund required under Section 11.A. of the Franchise Agreement.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees pay a royalty fee of 10% on gross sales from video gaming. This royalty fee is paid in the same manner and at the same time as the standard 5% royalty fee on other gross sales. Franchisees typically pay royalties weekly for the previous Monday-Sunday period. Payments are made via electronic transfer or automatic debit from the franchisee's bank account.
Browns Chicken also requires franchisees to contribute to the Advertising Fund. Franchisees must pay 4% of their gross video gaming sales to the Advertising Fund. This payment is also made in the same manner and at the same time as the general Advertising Fund contribution, which is also paid weekly via electronic transfer or automatic debit.
If a Browns Chicken franchisee fails to submit the required sales reports, Browns Chicken is authorized to withdraw an estimated royalty fee and advertising fund contribution. This estimate will be based on the average sales from the previous ten reported weeks. If a franchisee fails to report sales for two consecutive weeks, Browns Chicken will calculate the estimated withdrawal based on the average sales, plus an additional 10%, from the last ten reported weeks. Browns Chicken franchisees must obtain prior written approval before making any changes to their banking relationships, including changes to their general operating account or banks.