What is a Browns Chicken franchisee required to do if they lose possession of the store?

According to Browns Chicken's 2025 Franchise Disclosure Document, if a franchisee loses possession of their store before the franchise agreement expires, they must diligently seek a new location and reopen the store as quickly as commercially possible. If the franchisee fails to do so, they are liable to Browns Chicken for lost royalties and other damages for the remainder of the franchise term. This clause ensures that Browns Chicken continues to receive revenue and protects its brand presence.

This requirement places a significant responsibility on the franchisee. Losing a store location can be due to various reasons, such as lease disputes or unforeseen circumstances. Regardless of the cause, the franchisee is obligated to find a new suitable location and resume operations promptly. The franchisee bears the financial burden of this relocation, including costs associated with finding a new site, construction, and obtaining necessary permits.

The potential liability for lost royalties and other damages could be substantial, depending on the remaining term of the franchise agreement and the store's historical performance. This financial risk underscores the importance of carefully managing the lease and maintaining a strong business operation to avoid losing possession of the store. Franchisees should also consider business interruption insurance to mitigate potential losses during any relocation period.

It is common in franchising for franchisors to require franchisees to maintain continuous operation. This clause in the Browns Chicken franchise agreement aligns with that practice, ensuring that franchisees remain committed to the brand and continue generating revenue throughout the term of the agreement. Prospective franchisees should carefully evaluate their ability to meet this obligation before investing in a Browns Chicken franchise.