factual

Does Browns Chicken have to provide notice to the franchisee before terminating the agreement for failure to comply?

Browns_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (11) fails or refuses to comply with any mandatory specification, standard, operating procedure or rule prescribed by Brown relating to recipes, quality of food products, methods and procedures for preparing and serving food products, or cleanliness and sanitation of the Store, and does not correct such failure or refusal within seven (7) days after written notice thereof (which shall describe the corrective action that Franchisee must take) is delivered to Franchisee;

  • (12) fails to comply with any other mandatory specification, standard, operating procedure or rule prescribed by Brown, or with any provision of this Agreement and does not correct such failure within ten (10) days after notice thereof is delivered to Franchisee if such failure is to pay any money payable by Franchisee pursuant to any provision of this Agreement, otherwise within thirty (30) days after notice of such failure to comply (which shall describe the action that Franchisee must take to correct same) is delivered to Franchisee, provided that if such failure cannot reasonably be corrected within thirty (30) days, Franchisee must initiate within such thirty (30) day period, and thereafter continue, such action as will correct such failure within a reasonable time;

B. By Brown.

Brown may terminate this Agreement, effective upon delivery of notice of termination to Franchisee, if Franchisee, the Store or the principal owner or owners of the equity or operating control of Franchisee:

  • (1) fails to satisfactorily complete the training program as provided in Section 7 hereof;
  • (2) fails to lease or purchase an acceptable site for the Premises, develop the Store in accordance with plans and specifications approved by Brown and commence operation of the Store within one hundred eighty (180) days from the date of this Agreement;
  • (3) makes an assignment for the benefit of creditors or an admission of his inability to pay its obligations as they become due;
  • (4) files a voluntary petition in bankruptcy or any pleading seeking any reorganization, arrangement, composition, adjustment, liquidation, dissolution or similar relief under any law, or admitting or failing to contest the material allegations of any such pleading filed against it, or is adjudicated a bankrupt or insolvent, or a receiver is appointed for a substantial part of the assets of Franchisee or the Store, or the claims of creditors of Franchisee or the Store are abated or subject to a moratorium under any law;
  • (5) abandons, surrenders or transfers control of the operation of the Store or fails to continuously and actively operate the Store, unless precluded from doing so by damage to the Premises, war, civil disturbance, natural disaster, labor dispute or other event beyond Franchisee's reasonable control;
  • (6) suffers cancellation of or fails to renew or extend the lease or sublease for or otherwise fails to maintain possession of the Premises, unless the Store is relocated with the approval of Brown;
  • (7) submits to Brown on two (2) or more separate occasions during the term of the Franchise, a sales report, financial statement or tax return or schedule which understates the Gross Sales of the Store for any period by more than two percent (2%) or materially distorts any other material information;
  • (8) fails on three (3) or more separate occasions during the term of the Franchise to submit when due, sales reports, financial statements or tax returns or schedules or to pay, when due, the royalty fees, advertising contributions or other payments due to Brown or suppliers of the Store or otherwise repeatedly fails or refuses to comply with this Agreement, whether or not such failures or refusals are corrected after notice thereof is delivered to Franchisee;
  • (9) operates the Store in a manner that presents a health or safety hazard to its customers, employees, or the public;

Source: Item 22 — Contracts (FDD page 43)

What This Means (2025 FDD)

According to the 2025 Browns Chicken Franchise Disclosure Document, Browns Chicken is required to provide notice to the franchisee before terminating the agreement in certain situations. Specifically, if a franchisee fails or refuses to comply with mandatory specifications, standards, operating procedures, or rules related to recipes, food quality, preparation, cleanliness, or uniform policies, Browns Chicken must provide written notice describing the necessary corrective actions. The franchisee then has seven days to correct the issue.

Additionally, if a franchisee fails to comply with other mandatory specifications, standards, operating procedures, or any agreement provision, Browns Chicken must provide notice. The franchisee has 10 days to correct the failure if it involves monetary payments, or 30 days for other failures. If the failure cannot be reasonably corrected within 30 days, the franchisee must begin corrective action within that period and continue until the failure is resolved within a reasonable time.

However, Browns Chicken can terminate the agreement immediately upon delivery of notice for certain other causes. These include failing to complete the training program, failing to secure an acceptable site and commence operations within 180 days, making an assignment for the benefit of creditors, filing for bankruptcy, abandoning the store, failing to maintain possession of the premises, submitting false sales reports or financial statements, operating the store in a manner that presents a health or safety hazard, or other failures to comply with the agreement.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.