What happens if a Browns Chicken franchisee fails to maintain possession of the premises?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Brown may terminate this Agreement, effective upon delivery of notice of termination to Franchisee, if Franchisee, the Store or the principal owner or owners of the equity or operating control of Franchisee:
- (6) suffers cancellation of or fails to renew or extend the lease or sublease for or otherwise fails to maintain possession of the Premises, unless the Store is relocated with the approval of Brown.
(2) In the event Franchisee loses possession of the Store for whatever reason prior to the expiration of the term of this Agreement, Franchisee is required to diligently search for a new location and open and operate the Store as promptly as commercially practicable. In the event Franchisee fails to diligently pursue a new location and open a new Store, Franchisee shall be liable to Brown for Brown's lost royalties and other damages for the remainder of the franchise term.
- 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
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, if a franchisee fails to maintain possession of the store premises, Browns Chicken has the right to terminate the franchise agreement. This can occur if the franchisee suffers cancellation of, or fails to renew or extend the lease or sublease for the premises. However, this is not the case if the store is relocated with Browns Chicken's approval.
Additionally, if the franchisee loses possession of the store for any reason before the franchise term expires, they must diligently seek a new location and reopen the store as quickly as commercially possible. Failure to do so can result in the franchisee being liable to Browns Chicken for lost royalties and other damages for the remainder of the franchise term.
Furthermore, in the event that the franchisee is unable to maintain possession of the premises when the initial term of the franchise expires, the franchisee must secure substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for BROWN'S Stores in order to renew the franchise.