Is Browns Chicken obligated to renew a franchise if all conditions are met?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon expiration of the initial term of the Franchise or any renewal term of the Franchise, if:
- a. Brown is then offering franchises for BROWN'S Stores in the state where the Store is located; and
- b. Franchisee has substantially complied with this Agreement (or the then-effective franchise agreement) during its term; and
- c. Franchisee is not in default under or in any violation of any term of any other franchise agreement, lease, or other agreement with Brown;
- d. Franchisee maintains possession of and remodels and/or expands the Premises, adds or replaces equipment, fixtures, furnishings, furniture and signs and otherwise modifies the Store to bring it into compliance with specifications and standards then applicable under new or renewal franchises for BROWN'S Stores; or if Franchisee is unable to maintain possession of the Premises, or in the judgment of Brown, the Store should be relocated. Franchisee has secured substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for BROWN'S Stores; and
- e. Franchisee complies with Brown's then-current qualification and training requirements,
then Franchisee shall have the right to renew the Franchise for a renewal term of one (1) to five (5) years on the terms and conditions described below.
Notwithstanding the foregoing renewal provisions, if upon the expiration of the term of the Franchise or of any renewal term of the Franchise: (1) Franchisee has not, in Brown's judgment, updated the equipment, fixtures, furniture and signs and otherwise modified the Store to meet the specifications and standards then applicable under new franchises for BROWN'S Stores; or (2) Franchisee has failed to pay consistently when due any royalty fees, advertising
contributions or other payments due to Brown; or (3) Franchisee has failed to submit consistently when due reports or other data, information, supporting records or financial statements: then Brown may, in its-sole discretion, renew the Franchise only for a one (1) year term or for a term shorter than one (1) year, in Brown's sole discretion, on the terms and conditions provided in Brown's then standard franchise agreement for BROWN'S Stores (with appropriate modifications to reflect that it is for a renewal term).
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee has the right to renew their franchise under certain conditions. Browns Chicken is obligated to offer a renewal franchise if it is offering franchises for Browns Chicken stores in the state where the store is located, and the franchisee has substantially complied with the franchise agreement during its term. The franchisee must also not be in default or violation of any other agreement with Browns Chicken.
To qualify for renewal, the franchisee must maintain possession of the premises and remodel or expand it to meet the current specifications for new Browns Chicken franchises. If maintaining possession is not possible, the franchisee must secure a substitute premises that meets Browns Chicken's standards. Additionally, the franchisee must comply with Browns Chicken's current qualification and training requirements.
However, Browns Chicken retains some discretion in the renewal process. If the franchisee has not updated the store's equipment, fixtures, furniture, and signs to meet current standards, or if the franchisee has consistently failed to make timely payments of royalties, advertising contributions, or other fees, Browns Chicken may choose to renew the franchise for a shorter term, ranging from one year to less than one year, at its sole discretion. This shorter-term renewal would be under the terms and conditions of Browns Chicken's standard franchise agreement for renewals.