Will Browns Chicken franchisees receive compensation for sales made by Browns Chicken through other channels of distribution within the franchisee's territory?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
BROWN (on behalf of itself and its affiliates) retains the right, in its sole discretion:
- (1) to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to make sales within the Territory using our principal trademarks;
- (2) to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to make sales within the Territory under trademarks different from the ones you will use under the franchise agreement.
- (3) You will receive no compensation for such sales in the Territory by BROWN.
Source: Item 12 — TERRITORY (FDD pages 30–32)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, franchisees will not receive compensation for sales made by Browns Chicken through alternative channels of distribution within the franchisee's territory. Browns Chicken retains the right to use channels like the Internet, catalog sales, telemarketing, or other direct marketing sales to make sales within the franchisee's territory, even using Browns Chicken's principal trademarks or different trademarks.
This means that even if Browns Chicken generates sales within a franchisee's exclusive 5-mile radius territory through online orders or other means, the franchisee will not receive any portion of the revenue from those sales. This could impact a franchisee's potential revenue, especially if Browns Chicken actively promotes online or direct sales within the territory.
Prospective franchisees should consider the potential impact of these alternative sales channels on their profitability and discuss with Browns Chicken what strategies, if any, are in place to mitigate potential revenue loss. It is also important to understand how Browns Chicken promotes and manages these alternative channels and whether there are opportunities for franchisees to participate in or benefit from these sales.