What happens if a Browns Chicken franchisee fails to renew or extend the lease for the premises?

According to Browns Chicken's 2025 Franchise Disclosure Document, if a franchisee fails to renew or extend the lease for the premises, Browns Chicken has grounds to terminate the franchise agreement. Specifically, Browns Chicken may terminate the agreement if the franchisee "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".

Additionally, the lease agreement between the franchisee and the landlord should include provisions that protect Browns Chicken's interests. These provisions include Browns Chicken receiving notice from the landlord of any franchisee default at least ten days before eviction proceedings begin, giving Browns Chicken the option to cure the default within ten days of receiving notice and substitute itself as the lessee, and ensuring the premises are used exclusively as a Browns Chicken store. The lease should also allow for assignment to Browns Chicken if the Franchise Agreement is terminated by Browns Chicken or by the franchisee without cause.

Furthermore, Browns Chicken seeks to protect its interests by requiring the franchisee to execute a Collateral Assignment of Lease, which assigns all the franchisee's rights and interests as a tenant to Browns Chicken. This assignment serves as collateral and can be exercised by Browns Chicken if the franchisee defaults under the lease or the Franchise Agreement. Browns Chicken's approval of the franchisee's lease is contingent upon receiving this signed Collateral Assignment. The franchisee is also obligated to elect and exercise all options to extend or renew the lease at least thirty days before the option expires, and failure to do so allows Browns Chicken to act as the franchisee's attorney-in-fact to exercise the renewal option.