What is the Browns Chicken franchisee's obligation regarding maintaining possession of the premises?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon expiration of the initial term of the Franchise or any renewal term of the Franchise, if:
- a. Brown is then offering franchises for BROWN'S Stores in the state where the Store is located; and
- b. Franchisee has substantially complied with this Agreement (or the then-effective franchise agreement) during its term; and
- c. Franchisee is not in default under or in any violation of any term of any other franchise agreement, lease, or other agreement with Brown;
- d. Franchisee maintains possession of and remodels and/or expands the Premises, adds or replaces equipment, fixtures, furnishings, furniture and signs and otherwise modifies the Store to bring it into compliance with specifications and standards then applicable under new or renewal franchises for BROWN'S Stores; or if Franchisee is unable to maintain possession of the Premises, or in the judgment of Brown, the Store should be relocated. Franchisee has secured substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for BROWN'S Stores; and
- e. Franchisee complies with Brown's then-current qualification and training requirements,
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee's ability to maintain possession of the premises is tied to their right to renew their franchise agreement. To renew the franchise, the franchisee must maintain possession of the premises and remodel or expand it to comply with Browns Chicken's current standards for new or renewal franchises. If the franchisee cannot maintain possession, they must secure a substitute premises that meets Browns Chicken's specifications.
Browns Chicken retains significant control over the premises, regardless of whether the franchisee leases, subleases, or purchases the property. If the franchisee leases the premises, the lease agreement must include provisions that protect Browns Chicken's interests. Browns Chicken must receive notice of any franchisee default, have the option to cure the default and become the lessee, and ensure the premises are used only as a Browns Chicken store. The lease must also be assignable to Browns Chicken if the franchise agreement is terminated.
If a franchisee owns the real estate where the Browns Chicken store is located, Browns Chicken has the right to require the franchisee to enter into a lease agreement with them, which Browns Chicken will then sublease back to the franchisee. As long as the franchisee complies with the franchise agreement, Browns Chicken will continue the sublease. However, if the franchisee defaults, Browns Chicken can terminate the sublease and take possession of the premises or sublease it to another party. These stipulations ensure Browns Chicken can maintain control over the location and brand presence, even if the franchisee faces difficulties or the agreement is terminated.