If a Browns Chicken franchisee experiences a permanent disability, what triggers the transfer requirements?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
tners or shareholders of voting stock shall execute this Agreement or an assignment and assumption agreement undertaking to be bound, jointly and
severally, by all provisions of this Agreement; all issued and outstanding stock certificates of any such corporation shall bear a legend reciting or referring to the restrictions of Paragraphs B, C and D of this Section 22.
E. Death Or Disability of Franchisee.
- (1) Transfer of Interest in Franchise: Upon the death or permanent disability of Franchisee, or, if Franchisee is a corporation or partnership, upon the death or permanent disability of the owner of a controlling interest in Franchisee, the executor, administrator, conservator, guardians or other personal representative of such person shall transfer his interest in this Agreement and the Franchise, or such interest in Franchisee, to a third party approved by Brown. Such disposition of this Agreement and the Franchise, or such interest in Franchisee (including, without limitation, transfer by bequest or inheritance), shall be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability and shall be subject to all the terms and conditions applicable to transfers contained in this Section 22. Failure to so dispose of this Agreement and the Franchise, or such interest in Franchisee, within said period of time shall constitute a breach of this Agreement. Franchisee agrees to provide Brown with monthly written reports of progress toward effecting the transfer, from the date of death or disability until the transfer is completed.
- (2) Operation After Death or Permanent Disability. Upon the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, the executor, administrator, conservator, guardian or other personal representative of such person shall appoint a manager to operate the Store within a reasonable time, not to exceed thirty (30) days from the date of death or permanent disability of such person. The appointment of such manager shall be subject to the prior written approval of Brown and, if requested by Brown, such manager shall attend and complete Brown's training program for franchisees. Such manager shall execute Brown's then-current form of Confidentiality and Non-Competition Agreement. If in the judgment of Brown, the Store is not being managed properly after the death or permanent disability of Franchisee or the owner of a controlling interest in Franchisee, Brown shall have the right to appoint a manager for the Store to manage the Store for up to thirty (30) days. During that period, Franchisee shall either cause its manager to attend additional training, or appoint another manager. If Franchisee fails to do so, Brown may terminate this Agreement.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the transfer requirements are triggered upon the permanent disability of the franchisee. Specifically, if the franchisee's active participation in the Browns Chicken store is curtailed for a continuous period of three months, they will be deemed permanently disabled. This also applies to the owner of a controlling interest in the franchisee if the franchisee is a corporation or partnership.
Upon such a disability, the executor, administrator, conservator, guardian, or other personal representative is required to transfer the interest in the Franchise Agreement and the franchise itself to a third party approved by Browns Chicken. This transfer must be completed within a reasonable timeframe, not exceeding six months from the date of the permanent disability. During this period, the franchisee must provide Browns Chicken with monthly written reports detailing the progress of the transfer.
In the interim, within 30 days of the disability, a manager must be appointed to operate the Browns Chicken store, subject to Browns Chicken's approval. This manager may be required to complete Browns Chicken's training program and must execute a Confidentiality and Non-Competition Agreement. If Browns Chicken deems the store is not being managed properly, they reserve the right to appoint their own manager for up to 30 days, during which the franchisee must either provide additional training to their manager or appoint a new one, or risk termination of the Franchise Agreement.
This clause ensures that the Browns Chicken franchise continues to operate under approved management even if the original franchisee becomes unable to manage the business. It also protects Browns Chicken's interests by requiring the transfer of the franchise to a suitable, approved third party within a reasonable timeframe.