How much is the Browns Chicken sublessee required to deposit monthly for Taxes?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
To assure the payment by Sublessee of all real estate, personal property, and other taxes and assessments levied upon or with respect to the Premises during the Term, or any portion thereof, of the Lease or this Sublease and for which Tenant is responsible under the Lease ("Taxes"), and the payment of which is hereby undertaken by Sublessee in accordance with Paragraph 7 hereof, Sublessor may require Sublessee to deposit with Sublessor, on the first day of each month of the Term, an amount equal to one-twelfth (l/12th) of the total of all Taxes, the amount of each monthly payment of Taxes to be established by Sublessor on an annual basis, in such amount as Sublessor determines in its reasonable estimation will provide sufficient reserves from which to satisfy the Taxes next becoming due.
The amount of the monthly deposit for Taxes may be adjusted from time to time by Sublessor in the event of a change in the amount of the Taxes, or in the event Sublessor determines that the funds held by it are (or will be) insufficient for the payment of said Taxes.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, as a sublessee, you may be required to deposit funds monthly for taxes. Browns Chicken, as the sublessor, may require you to deposit one-twelfth of the total annual taxes on the first day of each month. This amount is determined annually by Browns Chicken based on their reasonable estimation of the taxes due.
The purpose of this monthly deposit is to ensure that all real estate, personal property, and other taxes and assessments related to the premises are paid on time. These taxes are the responsibility of the tenant under the lease, and as a sublessee, you are undertaking this responsibility.
Browns Chicken can adjust the amount of the monthly deposit if there is a change in the amount of taxes or if they determine that the funds held are insufficient to cover the upcoming tax payments. This means that your monthly payments could fluctuate based on changes in property tax rates or assessments. It is important to budget for potential increases in these payments to avoid any shortfalls.
This arrangement is fairly common in commercial leasing, where landlords often collect tax and insurance payments from tenants on a monthly basis to ensure these obligations are met. As a prospective Browns Chicken franchisee, it would be prudent to inquire about the estimated amount of these monthly tax deposits and how frequently they are adjusted to get a clear picture of your ongoing financial obligations.