How much notice must a Browns Chicken franchisee give Browns Chicken of a proposed sale of the business?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary |
|---|---|---|
| (a) Length of the franchise term | 2A | Approximately 15 years, subject to earlier termination as provided in the Franchise Agreement. |
| (b) Renewal or extension of the term | 2B | If you are in compliance with the Franchise Agreement and give 6 months’ notice of your intent to renew prior to the end of the term, Brown will renew the franchise for a 1 year (minimum) or 5 year term (maximum). |
| Provision | Section in Agreement | Summary |
| (c) Requirements for Franchisee to renew or extend | 2B | Compliance with Franchise Agreement and any other agreements, including leases; remodel and update; sign new franchise agreement; pay $5,000 renewal fee. The renewal agreement may contain materially different terms and conditions than your original contract, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees |
| (d) Termination by Franchisee | 20A | Only if you are in compliance with the Franchise Agreement and Brown fails to cure its own material breach within 30 days of written notice. |
| (e) Termination by Franchisor | None | No specific provision. |
| without cause | ||
| (f) Termination by Franchisor with cause | 20B and 21D | Brown can terminate the Franchise if you default under any agreement; upon termination of the Franchise, any sublease from Brown will terminate, and you may be required to assign your lease to Brown. |
| (g) "Cause" defined – curable defaults | 20B | Upon notice as provided in the Franchise Agreement, the following defaults may be curable: failure to complete training, failure to secure a site or retain or develop it according to Brown's specifications, non-payment of fees (unless repeated), failure to operate the Store in compliance with Brown's standards. For Illinois franchisees, Brown must give you a reasonable time franchise to cure, which need not be more than 30 days. If the time frame is less than 30 days, the causes must be related to health and safety. |
| (h) "Cause" defined –non-curable defaults | 20B | Non-curable defaults include: filing bankruptcy or making an assignment for the benefit of creditors, abandonment, repeated defaults even if cured, repeated filing of false reports, making unauthorized transfer of franchise, conviction of crime, making material misrepresentations, making unauthorized use of proprietary information, competition with Brown. |
| (i) Franchisee’s obligations on | 21A-F | Payment of all sums due Brown; must stop use of proprietary |
| termination/non-renewal | information, no competition. | |
| (j) Assignment of contract by | 22A | Fully assignable by Brown. |
| Franchisor | ||
| (k) "Transfer" by Franchisee | 22B and 22E | Any type of transfer, including change in ownership. |
| --defined | ||
| (l) Franchisor's approval of | 22B | No transfer without Brown's approval. |
| transfer by Franchisee | ||
| (m) Conditions for Franchisor’s | 22C and 22D | Full compliance with all agreements, Brown's approval of |
| approval of transfer by | proposed new franchisee, transfer fee must be paid, new | |
| Franchisee | franchisee must execute all agreements. | |
| (n) Franchisor's right of first refusal to acquire Franchisee’s business | 22G | Franchisee must give Brown 30 days’ notice of terms of proposed sale; Brown may purchase on same terms; Brown's right of first refusal renews if sale to proposed transferee is not consummated within 6 months from date of first notice. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–38)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee must provide Browns Chicken with 30 days' notice regarding the terms of a proposed sale of the business. This advance notice allows Browns Chicken to exercise its right of first refusal, meaning they have the option to purchase the franchise on the same terms offered by the proposed buyer.
This right of first refusal is a common practice in franchising, giving Browns Chicken the ability to maintain control over who joins their franchise system. If Browns Chicken declines to purchase the franchise, the franchisee is then free to proceed with the sale to the original proposed buyer.
However, if the sale to the initial proposed transferee does not occur within 6 months from the date of the first notice, Browns Chicken's right of first refusal is renewed. This means that if the franchisee later finds another buyer, the 30-day notice and right of first refusal process would need to be repeated. This clause ensures that Browns Chicken consistently has the opportunity to buy the franchise before it is sold to someone else.