On what page of the Browns Chicken franchise agreement are royalty fees and other payments discussed?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
19. ROYALTY FEE AND OTHER PAYMENTS.
A. Amount and Payment of Royalty Fee.
Franchisee agrees to pay to Brown a weekly royalty fee of five percent (5%) of the Gross Sales of the Store (except for revenue from Video Gaming, the royalty fee on which is ten percent (10%) – see Exhibit G), payable on Gross Sales for each Monday through Sunday period by electronic transfer or automatic debit from Franchisee's bank account to Brown, as set forth below in Paragraph 19.F.
B. Definition of "Gross Sales".
The term "Gross Sales," as used in this Agreement, shall mean and include the aggregate actual gross selling prices of all food, beverages, and other products and services (including without limitation entertainment/video gaming) sold and/or performed and/or offered by or for Franchisee or the Store, in, upon or from the Premises, or through or by means of the business conducted therein or otherwise by the Store or Franchisee, including direct or indirect barter transactions, catering services, proceeds of business interruption insurance policies, whether for cash or for credit, provided, that in determining the amount of Gross Sales, there shall be excluded: (1) sales, use, or excise taxes passed on as such to the customer and paid to the
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, royalty fees and other payments are discussed in paragraph 19 of Item 22, Contracts, within the standard franchise agreement. Specifically, paragraph 19.A details the amount and payment of the royalty fee, stating that franchisees must pay a weekly royalty fee of 5% of the store's gross sales, with a different rate of 10% for revenue from video gaming. This fee is payable weekly via electronic transfer or automatic debit. Paragraph 19.B defines "Gross Sales" as the aggregate actual gross selling prices of all food, beverages, and other products and services sold by the franchisee.
Paragraph 19.F outlines the Bank Draft Plan, which requires franchisees to make all payments, including royalty fees and advertising fund contributions, through a designated bank account that Browns Chicken can draft from. Rider C to the agreement contains the form authorizing this bank draft.
These sections of the Browns Chicken franchise agreement clearly define the franchisee's financial obligations and the methods of payment. Prospective franchisees should carefully review these sections to understand the ongoing costs associated with operating a Browns Chicken franchise and ensure they are prepared to meet these financial requirements.