What is the geographic scope of the advertising and promotion programs conducted by Brown's Chicken?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
th the royalty fee as set forth in Paragraph l9.A of this Agreement. Franchisee's payments to the Advertising Fund shall be made by electronic transfer or automatic debit from Franchisee's bank account to the Advertising Fund account, as set forth in Paragraph 19.F. below.
Brown shall direct all advertising programs financed by the Advertising Fund, with sole discretion over the creative concepts, materials and endorsements used therein, and the geographic, market and media placement and allocation thereof. Franchisee agrees that the Advertising Fund may be used to meet any and all costs of formulating, administering, maintaining, directing, preparing and producing regional, multi-regional or local advertising materials, programs and public relations activities, including, without limitation, the costs of producing video, audio and written advertising materials; electronic media, developing, implementing, and maintaining an electronic commerce Website and/or related strategies; administering multi-regional advertising programs; purchasing trade journal, direct mail and other media advertising; and employing advertising agencies; supporting public relations, market research and marketing activities; and providing advertising and marketing materials and menus to BROWN'S Stores. The Advertising Fund shall furnish Franchisee with approved advertising materials at its direct cost of producing such advertising materials.
The Advertising Fund is not Brown's asset. Although the Advertising Fund is not a trust, Brown will hold all Advertising Fund contributions for the benefit of the contributors and use contributions only for the purposes described in this Agreement. Brown does not owe any fiduciary obligation to Franchisee for administering the Advertising Fund or for any other reason. The Advertising Fund shall be accounted for separately from the other funds of Brown and shall not be used to defray any of Brown's general operating expenses, except for such reasonable salaries, administrative costs and overhead as Brown may incur in activities reasonably related to the administration of the Advertising Fund and its advertising programs (including, without limitation, conducting market research, preparing advertising and marketing materials and collecting and accounting for contributions to the Advertising Fund). Brown may spend in any fiscal year an amount greater or less than the aggregate contribution of BROWN'S Stores to the Advertising Fund in that year and the Advertising Fund may borrow from Brown or other lenders to cover deficits of the Advertising Fund or cause the Advertising Fund to invest
any surplus for future use by the Advertising Fund.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the advertising programs financed by the Advertising Fund can be regional, multi-regional, or local. Browns Chicken has sole discretion over the creative concepts, materials, endorsements, geographic market, media placement and allocation of these advertising programs. Browns Chicken will endeavor to utilize the Advertising Fund to develop advertising and marketing materials, and to place advertising in a manner, that will benefit all BROWN'S Stores. However, Browns Chicken undertakes no obligation to ensure that expenditures by the Advertising Fund in or affecting any geographic area are proportionate or equivalent to contributions to the Advertising Fund by BROWN'S Stores operating in that geographic area or that any BROWN'S Store will benefit directly or in proportion to its contribution to the Advertising Fund from the development of advertising and marketing materials or the placement of advertising.
Browns Chicken also requires franchisees to conduct a grand opening advertising campaign within 30 days of opening their store and to list and advertise the store in classified telephone directories distributed within its territory. Franchisees must submit samples of local advertising and promotional materials not prepared or previously approved by Browns Chicken for approval, and Browns Chicken must provide written disapproval within 15 days of receipt of such materials.
This means that as a Browns Chicken franchisee, you will contribute to an advertising fund that may be used for advertising programs that cover different geographic areas. While Browns Chicken aims to benefit all stores, there's no guarantee that the advertising efforts will directly correlate with your specific location or contribution to the fund. You also have a responsibility to engage in local advertising, subject to Browns Chicken's approval, to promote your specific store within your territory.