What is a Browns Chicken franchisee required to do if an electronic bank draft is dishonored?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
fee and Advertising Fund contribution, based on the average sales, plus ten percent (10%) for the last ten (10) reported weeks.
- (3) Franchisee may not make any change in its banking relationships, including any change in the account number of its general operating account, or any change in banks, without Brown's prior written approval.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, if an electronic bank draft is declined, dishonored, or refused due to insufficient funds, the franchisee must take specific actions. First, the franchisee is required to pay Browns Chicken a processing fee of $50.00. This fee is intended to cover the administrative costs associated with the failed transaction. Second, the franchisee must immediately address the reason why the bank draft was dishonored, typically by depositing sufficient funds into the account. Finally, the franchisee is obligated to notify Browns Chicken that the issue has been resolved and that the electronic bank draft will be honored in the future.
This policy ensures that Browns Chicken is compensated for the inconvenience and potential financial risk associated with dishonored payments. It also places the responsibility on the franchisee to maintain adequate funds in their account and to communicate promptly with Browns Chicken to resolve any payment issues. The $50 processing fee is a relatively standard practice in franchising and other business relationships where electronic payments are common.
For a prospective Browns Chicken franchisee, this means maintaining diligent oversight of their bank account to avoid insufficient funds and promptly addressing any issues that may arise. Failure to do so can result in additional fees and potential disruption of the payment process. Furthermore, consistently dishonored payments could potentially lead to further action from Browns Chicken, as it indicates a potential financial instability or mismanagement on the part of the franchisee.