Are the remedies available to Browns Chicken for failure to report sales in addition to other remedies?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
wn's financial or other individual interest. Examples of items that will promote or benefit all franchises and the System include but are not limited to enhancing the value of the Marks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization and improving the competitive position of the System.
24. MONETARY PENALTIES FOR NON-COMPLIANCE.
- A. If Franchisee commits any of the defaults described in this Section 24, Brown may impose monetary penalties on Franchisee, in addition to the other remedies set forth in this Section 24 and elsewhere in this Agreement. The imposition of a penalty in no manner limits Brown's right to exercise any other remedy available under this Agreement or in law. Brown will deposit any penalties paid, less its costs to collect them, into the Marketing Fund.
- B. Failure to Rep
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken can impose monetary penalties on a franchisee for defaults, and these penalties are in addition to other remedies available. Specifically, if a franchisee fails to report gross sales or furnish required reports and financial statements by the stated deadlines, they will pay Browns Chicken a penalty of $100 per day. This penalty starts on the fifteenth day after the performance is due and continues until the default is resolved.
This means that Browns Chicken franchisees need to be diligent in reporting their gross sales and providing all necessary financial documentation on time. Failure to do so will not only result in a daily monetary penalty but also does not limit Browns Chicken's right to pursue any other remedies available to them under the Franchise Agreement or by law.
The FDD specifies that Browns Chicken will deposit any penalties paid, less the costs to collect them, into the Marketing Fund. This implies that the penalties are not designed to enrich Browns Chicken directly but rather to support the overall marketing efforts for the benefit of all franchisees. However, franchisees should be aware that Browns Chicken will deduct its costs to collect the penalties before depositing the remainder into the Marketing Fund.
This policy is fairly standard in franchising, as franchisors need accurate sales data to calculate royalties and advertising fund contributions. The daily penalty serves as an incentive for franchisees to comply with reporting requirements and maintain transparency in their financial dealings with Browns Chicken. The fact that these penalties do not preclude other legal or contractual remedies underscores the importance of adhering to the franchise agreement's reporting stipulations.