What is the Browns Chicken franchisee's obligation regarding the terms and conditions of Rider G?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisee shall report to its insurance carrier the presence of Video Gaming at Franchisee's Store, and shall obtain and maintain liability insurance in an amount that Brown determines is reasonably necessary.
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- Franchisee indemnifies Franchisor against any claim, cost, damage, loss, or cause of action that may be brought against Franchisor arising out of the Video Gaming activities in Franchisee's Store.
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- This Rider G is not assignable by Franchisee under any circumstances, even if Franchisee's Franchise Agreement is assigned. The reason for this provision is that Section 50(c) of the Act provides that no license issued under the Act is transferable or assignable.
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- Franchisee shall take all steps required to maintain Franchisee's Store as a Licensed Establishment.
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- So long as Franchisee's Store is a Licensed Establishment, Franchisee shall operate all the Video Gaming Terminals during all the legal hours of operation as described in Paragraph 13 above. The only exception to this obligation is in the event Franchisee requests, and Brown consents in writing to such request, for a partial or complete cessation of Video Gaming at Franchisee's Store.
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- No other terms, provision, obligation, or covenant in the Franchise Agreement shall be affected by this Rider G.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Rider G outlines the terms and conditions under which a franchisee can offer video gaming at their store. Browns Chicken gives conditional consent for video gaming at the franchisee's store, provided the franchisee adheres to the terms and conditions specified in Rider G.
Specifically, the franchisee must report the presence of video gaming to their insurance carrier and maintain liability insurance in an amount that Browns Chicken deems reasonably necessary. The franchisee is also obligated to indemnify Browns Chicken against any claims, costs, damages, losses, or causes of action arising from the video gaming activities at the franchisee's store.
Furthermore, the franchisee is responsible for maintaining their store as a licensed establishment and operating all video gaming terminals during legal hours of operation, unless Browns Chicken consents in writing to a partial or complete cessation of video gaming. Rider G is not assignable by the franchisee, even if the Franchise Agreement is assigned, due to restrictions under the Illinois Video Gaming Act. If the franchisee violates any provision of Rider G or the Franchise Agreement, Browns Chicken has the right to terminate Rider G, typically with ten days' notice, except in cases where the franchisee's license as a Licensed Establishment is revoked, in which case termination is immediate.
The franchisee must also ensure that any agreement with a terminal operator includes a provision allowing for termination with ten days' notice if Browns Chicken exercises its termination right, or immediate termination if the franchisee's license is revoked. If Rider G is terminated, the franchisee must promptly remove all video gaming terminals and equipment and cease all video gaming activities at the store. These obligations ensure that Browns Chicken is protected from liabilities associated with video gaming and that the franchisee operates the video gaming activities in compliance with applicable laws and the franchise agreement.