Can Browns Chicken freely assign the franchise agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary |
|---|---|---|
| (j) Assignment of contract by | 22A | Fully assignable by Brown. |
| Franchisor | ||
| (k) "Transfer" by Franchisee | 22B and 22E | Any type of transfer, including change in ownership. |
| --defined | ||
| (l) Franchisor's approval of | 22B | No transfer without Brown's approval. |
| transfer by Franchisee | ||
| (m) Conditions for Franchisor’s | 22C and 22D | Full compliance with all agreements, Brown's approval of |
| approval of transfer by | proposed new franchisee, transfer fee must be paid, new | |
| Franchisee | franchisee must execute all agreements. |
| Provision | Provision in Preliminary Agreement | Summary |
|---|---|---|
| e. Assignment by | Paragraph 22 | You may not assign the Video Gaming Rider G even if you |
| Franchisee | assign the Franchise Agreement |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–38)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken can freely assign the franchise agreement. The FDD outlines the provisions related to the assignment of the franchise agreement by both the franchisor and the franchisee. Specifically, Browns Chicken has the right to fully assign the franchise agreement.
However, the franchisee's ability to assign the agreement is restricted. The franchisee cannot transfer the franchise without Browns Chicken's approval. To gain approval for a transfer, the franchisee must be in full compliance with all agreements, Browns Chicken must approve the proposed new franchisee, a transfer fee must be paid, and the new franchisee must execute all required agreements.
Additionally, the franchisee cannot assign the Video Gaming Rider G, even if the Franchise Agreement is assigned. This restriction adds another layer of complexity to any potential transfer, as the rights associated with video gaming are not automatically transferable with the franchise itself. Prospective franchisees should carefully consider these restrictions and requirements related to assignment and transfer, as they can significantly impact the flexibility and potential resale value of the franchise.