What section of the Browns Chicken franchise agreement covers the initial franchise fee?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ue the use of such Mark, and/or use one or more additional or substitute trademarks or service marks, within a reasonable time after notice thereof by Brown. Franchisee shall be responsible for the expenses to modify or discontinue the use of a Mark and/or to substitute a trademark or service mark for a discontinued Mark.
18. INITIAL FRANCHISE FEE.
Franchisee shall pay to Brown a non-recurring and non-refundable initial franchise fee for the Franchise in the amount of Twenty-Five Thousand Dollars ($25,000.00), Fifteen Thousand Dollars ($15,000.00) of which shall be payable upon the signing of the Preliminary Agreement by Franchisee, with the balance due and payable prior to the opening of the Store. The initial franchise fee will be fully earned by Brown upon execution of this Agreement, and non-refundable, provided that if Brown elects to terminate the Fran
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the initial franchise fee is addressed in Section 18 of the franchise agreement. This section stipulates that the franchisee must pay Browns Chicken a non-recurring and non-refundable initial franchise fee of $25,000 for the franchise.
Specifically, $15,000 of this fee is due upon signing the Preliminary Agreement, with the remaining balance payable before the store's opening. Browns Chicken considers the entire initial franchise fee fully earned upon the execution of the Franchise Agreement. This means that once the agreement is signed, the fee is non-refundable under most circumstances.
However, there is an exception: if Browns Chicken terminates the franchise agreement because the franchisee fails to complete the training program satisfactorily, Browns Chicken will refund the initial franchise fee. From this refund, Browns Chicken will deduct expenses they incurred related to granting the franchise and training the franchisee and their designees. This condition provides a limited safeguard for the franchisee, ensuring they may recover a portion of their investment if they do not complete training due to circumstances deemed unsatisfactory by Browns Chicken.