If the Browns Chicken prospective franchisee withdraws their application before site submission and approval, what specific action triggers the termination of the Preliminary Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
n the form delivered to PROSPECTIVE FRANCHISEE. In the event PROSPECTIVE FRANCHISEE fails to execute BROWN's Franchise Agreement within said ten (10) days, BROWN may, at its sole option, terminate this Preliminary Agreement, in which event PROSPECTIVE FRANCHISEE shall not be entitled to any refund of the Deposit.
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- BROWN agrees to expend such time and effort and to incur such expense as may reasonably be required to inspect sites proposed by PROSPECTIVE FRANCHISEE for a Store to be operated by PROSPECTIVE FRANCHISEE. PROSPECTIVE FRANCHISEE may withdraw his application for a Franchise and terminate this Preliminary Agreement by a written notice of termination delivered to BROWN at any time prior to the submission by PROSPECTIVE FRANCHISEE of a proposed site and BROWN's approval of said site. In the event PROSPECTIVE FRANCHISEE withdraws his application for a Franchise after a site has been approved, PROSPECTIVE FRANCHISEE will not be entitled to any refund of the Deposit.
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- Upon termination pursuant to Paragraph 3.d. above, BROWN shall refund PROSPECTIVE FRANCHISEE's Deposit less Three Thousand ($3,000.00) Dollars. Upon termination pursuant to Paragraph 5 above, prior to the approval by BROWN of a site, BROWN shall refund PROSPECTIVE FRANCHISEE's Deposit less Three Thousand ($3,000.00) Dollars. Upon termination pursuant to Paragraph 5 above, subsequent to the approval by BROWN of a site, PROSPECTIVE FRANCHISEE shall not be entitled to an
Source: Item 23 — RECEIPT (FDD pages 43–202)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a prospective franchisee can withdraw their application and terminate the Preliminary Agreement by delivering a written notice of termination to Browns Chicken. This termination must occur before the franchisee submits a proposed site and before Browns Chicken approves that site.
If the franchisee terminates the agreement in this manner, Browns Chicken will refund the franchisee's deposit, less $3,000. The $3,000 is withheld to compensate Browns Chicken for expenses incurred in connection with the proposed franchise purchase. These expenses include site selection, inspection, travel, living expenses, employee compensation, and legal fees.
It is important to note that if the franchisee withdraws their application after Browns Chicken has approved a site, the franchisee will not be entitled to any refund of the deposit. This highlights the importance of carefully evaluating the site before Browns Chicken's approval to avoid losing the deposit money.