How must the purchase price be paid to Browns Chicken at the closing of the purchase?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) The purchase price, as determined above, shall be paid in cash at the closing of the purchase, which shall take place no later than sixty (60) days after the delivery of Brown's notice of its election to purchase the Store, at which time Franchisee shall: (1) deliver instruments transferring good and merchantable title to the assets purchased, free and clear of all liens, encumbrances and liabilities to Brown or its designee, with all sales and other transfer taxes paid by Franchisee; (2) transfer or assign all licenses or permits which may be assigned or transferred; (3) assign to Brown or its designee Franchisee's leasehold interest in the premises of the Store or, if an assignment is prohibited, sublease
same to Brown or its nominee for the full remaining term and on the same terms and conditions as Franchisee's lease, including renewal and/or purchase options; and (4) assign to Brown or its designee any leases for any other tangible assets used in connection with the Store. In the event that Franchisee cannot deliver clear title to all of the Purchased Assets as aforesaid, or in the event there shall be other unresolved issues, the closing of the sale shall, at Brown's option, be accomplished through an escrow. Further, Franchisee and Brown shall, prior to closing, comply with the Bulk Sales provisions of the Uniform Commercial Code as enacted or previously in force in the state where the Store is located. Brown shall have the right to set off against and reduce the purchase price by any and all amounts owed by Franchisee to Brown or any of its Affiliates.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the purchase price for the store's assets must be paid in cash at the closing of the purchase. This closing will occur no later than sixty days after Browns Chicken notifies the franchisee of its decision to purchase the store.
At the closing, the franchisee is required to transfer clear title to the purchased assets to Browns Chicken or its designee, ensuring that the assets are free of any liens, encumbrances, or liabilities. The franchisee is also responsible for paying all sales and other transfer taxes. Additionally, the franchisee must transfer or assign all assignable or transferable licenses and permits to Browns Chicken or its designee.
Furthermore, the franchisee must assign their leasehold interest in the store's premises to Browns Chicken or its nominee for the remaining term of the lease, including any renewal or purchase options. If a direct assignment is prohibited, the franchisee must sublease the premises to Browns Chicken or its nominee under the same terms and conditions as the original lease. The franchisee must also assign any leases for other tangible assets used in connection with the store to Browns Chicken or its designee.
In cases where the franchisee cannot provide clear title to all purchased assets or if there are unresolved issues, the closing of the sale may be conducted through an escrow account, at Browns Chicken's discretion. Browns Chicken also has the right to offset any amounts owed by the franchisee to Browns Chicken or its affiliates against the purchase price. Both the franchisee and Browns Chicken must comply with the Bulk Sales provisions of the Uniform Commercial Code before closing.