How much notice must a Browns Chicken franchisee give Browns Chicken regarding a proposed sale of the business?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary |
|---|---|---|
| (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 is to allow Browns Chicken to exercise its right of first refusal. Browns Chicken has the option to purchase the franchise on the same terms as the proposed sale.
This right of first refusal is a common clause in franchise agreements. It allows the franchisor to maintain control over who enters the franchise system. If Browns Chicken declines to purchase the franchise, the franchisee is free to proceed with the sale to the proposed buyer, subject to Browns Chicken's approval of the new franchisee.
However, if the sale to the proposed transferee is not completed within 6 months from the date of the initial notice, Browns Chicken's right of first refusal is renewed. This means the franchisee would need to provide another 30 days' notice if they wish to proceed with a sale after that 6-month period. This provision ensures that Browns Chicken has an updated opportunity to exercise its right of first refusal if the terms of the sale change or if a significant amount of time has passed.