Is a Browns Chicken franchisee required to use a Bank Draft Plan to make payments?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
or its affiliates, interest or any other indebtedness.
E. Expenses of Enforcement.
Franchisee shall be obligated to reimburse Brown for Brown's costs and expenses (including attorneys' fees) incurred by Brown in the enforcement by Brown of the provisions of this Agreement as a consequence of Franchisee's failure to perform same.
F. Bank Draft Plan.
(1) Franchisee shall make payments of the royalty fee, Advertising Fund contributions, and all other payments due Brown through a Bank Draft Plan on a bank account Franchisee is required to establish and maintain for the purpose of making payments to Brown. Franchisee shall execute such documents as may be required from time to time by Brown to permit Brown to withdraw from Franchisee's general operating checking
account the amounts due Brown. The form authorizing the bank draft is attached as Rider C.
- (2) In the event Franchisee fails to submit required reports to Brown, Brown will withdraw an estimated amount for the royalty fee and Advertising Fund contribution, based on the average sales for the last ten (10) reported weeks. If Franchisee fails to report sales for two (2) consecutive weeks, Brown will withdraw an estimated amount for the royalty 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.
- (4) In the event any electronic bank draft is declined, dishonored, or refused, due to insufficient funds, Franchisee shall pay the Brown a processing fee of Fifty Dollars ($50.00). Franchisee shall also immediately remedy the reason the electronic bank draft was disho
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees are required to make payments through a Bank Draft Plan. This plan mandates that franchisees establish and maintain a bank account specifically for making payments to Browns Chicken. Franchisees must also execute documents that allow Browns Chicken to withdraw the amounts due from the franchisee's general operating checking account. A form authorizing the bank draft is included as Rider C in the franchise agreement.
If a Browns Chicken franchisee fails to submit required reports, Browns Chicken will withdraw an estimated amount for the royalty fee and Advertising Fund contribution. This estimate is based on the average sales for the last ten reported weeks. If a franchisee fails to report sales for two consecutive weeks, Browns Chicken will withdraw an estimated amount based on the average sales, plus an additional ten percent, for the last ten reported weeks.
Furthermore, Browns Chicken franchisees cannot change their banking relationships, including account numbers or banks, without prior written approval from Browns Chicken. If an electronic bank draft is declined, dishonored, or refused due to insufficient funds, the franchisee must pay Browns Chicken a processing fee of $50.00. The franchisee is also responsible for immediately resolving the issue that caused the bank draft to be dishonored and notifying Browns Chicken that the draft will be honored. Browns Chicken may also withdraw amounts due for miscellaneous items (e.g., equipment, uniforms, product transfers) that are over 30 days past due through the Bank Draft Plan.