What obligations remain in effect for a Browns Chicken franchisee during the Interim Term?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Franchisee does not execute the Renewal Franchise Agreement after the expiration of the term of the Franchise, and continues to accept any of the benefits of this Agreement after the expiration of the term of the Franchise, then at Brown's option, this Agreement may be treated either as: (i) expired as of the date of the expiration with
Franchisee then operating without a franchise to do so and in violation of Brown's right; or (ii) continued on a month-to-month basis (the "Interim Term") until either party provides the other party with written notice of such party's intention to terminate the Interim Term. In the latter case, all of Franchisee's obligations shall remain in full force and effect during the Interim Term as if this Agreement had not expired, and all obligations and restrictions imposed on Franchisee upon expiration of this Agreement shall be deemed to take effect upon termination of the Interim Term. In the event of either (i) or (ii) of this Paragraph, Franchisee shall be obligated to pay a weekly royalty fee in the amount of seven percent (7%) of the Gross Sales of the Store (as defined in Paragraph 19.B. hereof).
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the Interim Term refers to a month-to-month extension of the franchise agreement that may occur if the franchisee does not renew the agreement after its expiration but continues to operate the franchise. During this Interim Term, all of the franchisee's obligations remain in full force and effect, as if the original agreement had not expired.
This means the franchisee must continue to adhere to all operational standards, pay royalties, and fulfill all other requirements outlined in the original franchise agreement. Specifically, the franchisee is obligated to pay a weekly royalty fee of seven percent (7%) of the store's gross sales during the Interim Term.
This arrangement continues until either Browns Chicken or the franchisee provides written notice of their intention to terminate the Interim Term. Upon termination of the Interim Term, all obligations and restrictions imposed on the franchisee upon the expiration of the original agreement take effect.