Can Browns Chicken prescribe obligations that approved suppliers must assume?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee proposes to purchase and use in the operation of the Store, or to offer for sale at or from the Store any type or brand of product which is not then approved by Brown as meeting its specifications and standards or to purchase any product from a supplier that is not then an approved supplier, Franchisee shall first notify Brown and shall, upon request by Brown, submit such information, specifications and samples as Brown requests for examination and/or testing or to otherwise determine whether such type or brand of product or such proposed supplier meets its specifications and standards. Brown shall have the right to charge Franchisee a reasonable fee to cover Brown's costs incurred in making such determination. Brown shall notify Franchisee, within a reasonable time, whether it approves such proposed type or brand of product or such proposed supplier. Brown may from time to time prescribe procedures for the submission of requests for approved types or brands of products or approved suppliers and obligations which approved suppliers must assume.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken may prescribe obligations that approved suppliers must assume. Specifically, Browns Chicken has the right to set procedures for requests related to approved types or brands of products, as well as for approved suppliers. This includes setting obligations that these approved suppliers must adhere to.
This means that Browns Chicken franchisees are required to purchase goods from suppliers that Browns Chicken has approved. Browns Chicken can modify its list of approved suppliers and the franchisee must comply with these changes after receiving written notice. The approval of these distributors or suppliers may be temporary and may be conditioned on requirements such as frequency of delivery, standards of service, and attention to complaints.
This policy allows Browns Chicken to maintain consistency and quality across all franchise locations. It also allows Browns Chicken to potentially negotiate better pricing or services by concentrating purchases with a smaller group of suppliers. For a prospective franchisee, this means less autonomy in choosing suppliers but also the benefit of potentially lower costs and assured quality, as well as the risk of having to change suppliers if Browns Chicken modifies its approved list.