What will Browns Chicken do if a franchisee fails to submit required reports?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
any of the defaults described in this Section 24, Brown may impose monetary penalties on Franchisee, in addition to the other remedies set forth in this Section 24 and elsewhere in this Agreement. The imposition of a penalty in no manner limits Brown's right to exercise any other remedy available under this Agreement or in law. Brown will deposit any penalties paid, less its costs to collect them, into the Marketing Fund.
- B. Failure to Report Gross Sales and to Furnish Reports and Financial Statements. Franchisee shall pay Brown a penalty of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th) day from the date performance is due, up through and including the day the default is cured, if he fails to report the Gross Sales of the Store, or to furnish the reports and financial statements, as set forth in Paragraph 12.B. by the stated deadlines.
- C. Failure to Pay Royalty Fees or Advertising Fund contributions. Franchisee shall pay Brown a penalty of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th)
day from the date performance is due, up through and including the day the default is cured, if Franchisee is in default in the payment of the royalty fee required under Paragraph 19.A. or Advertising Fund contribution under Paragraph 11.A.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken FDD, if a franchisee fails to submit required reports and financial statements, Browns Chicken may impose monetary penalties. Specifically, Browns Chicken will assess a penalty of $100 per day, starting on the fifteenth day after the report was due, and continuing until the franchisee submits the required information. Browns Chicken will deposit any penalties paid, less its costs to collect them, into the Marketing Fund.
In addition to monetary penalties, Browns Chicken may terminate the Franchise Agreement if a franchisee fails to submit sales reports, financial statements, or tax returns when due on three or more separate occasions during the term of the franchise. This termination clause underscores the importance Browns Chicken places on timely and accurate reporting from its franchisees.
These policies highlight the importance of franchisees maintaining organized records and adhering to reporting deadlines. The daily penalty can quickly add up, creating a significant financial burden for franchisees who are late in submitting their reports. The potential for termination of the franchise agreement further emphasizes the need for franchisees to prioritize compliance with all reporting requirements.