What section of the Browns Chicken franchise agreement discusses the exclusive relationship?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Brown of confidential treatment for the information required to be so disclosed; or (b) information, processes or techniques which are or become generally known in the restaurant industry, other than through disclosure by Franchisee.
15. EXCLUSIVE RELATIONSHIP.
Franchisee acknowledges and agrees that Brown would be unable to protect the Confidential Information against unauthorized use and disclosure and would be unable to encourage a free exchange of ideas and information among BROWN'S Stores if owners of BROWN'S Stores and members of their immediate families were permitted to hold interests in or perform services for competitive businesses. Brown has entered into this Agreement with Franchisee on the express condition that with respect to the operation of a retail food service business which offers cooked chicken, pasta, or sandwiches. Franchisee (and its owners and members of their respective immediate families) will deal exclusively with Brown. Franchisee therefore agrees that during the term of this Agreement, except for the Store and other BROWN'S Stores operated under franchise agreements with Brown: (1) neither Franchisee, nor any shareholder or partner of Franchisee (in the event Franchisee, is a corporation or partnership), nor any member of the immediate family of Franchisee or any shareholder or partner of Franchisee, shall have any direct or indirect interest as a disclosed or beneficial owner of any retail food service business wherever located, that offers cooked chicken, pasta or sandwiches, or any direct or indirect interest in any entity which is granting franchises or licenses to others to operate retail food service businesses that offer cooked chicken, pasta or sandwiches; and (2) neither Franchisee nor any partner or shareholder of Franchisee shall perform services as a director, officer, manager, employee, consultant, lessor, lender, representative, agent or otherwise for any retail food service business wherever located, that offers cooked chicken, pasta or sandwiches; provided that the restrictions of this Section 15 shall not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the- counter market that represent one percent (1%) or less of the number of shares of that class of securities issued and outstanding.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Section 15 of Item 22, Contracts, outlines the exclusive relationship between Browns Chicken and its franchisees. This section emphasizes that Browns Chicken relies on franchisees to maintain the confidentiality of proprietary information and foster open communication within the Browns Chicken system.
To ensure these conditions, Browns Chicken requires franchisees and their immediate family members to commit to an exclusive relationship. This means that during the term of the Franchise Agreement, franchisees (including their owners and immediate family members) cannot hold any direct or indirect interest in any retail food service business that offers cooked chicken, pasta, or sandwiches, except for the franchised Browns Chicken store or other Browns Chicken stores operated under franchise agreements with Browns Chicken. They are also prohibited from being involved in any entity that grants franchises or licenses for similar retail food service businesses.
Furthermore, franchisees and their partners or shareholders are restricted from providing services to any competing retail food service business, regardless of location. However, there is an exception for owning shares of publicly-traded securities that represent 1% or less of the outstanding shares. This exclusive relationship clause is a standard practice in franchising to protect the brand and prevent conflicts of interest among franchisees.