What sections of the Browns Chicken Franchise Agreement cover site selection and acquisition/lease?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Selection Of Store Location.
In determining a suitable location for a BROWN's Store, Brown considers such factors as the nature of and proximity to competing stores, traffic patterns, and amount of rent and/or cost of site. You are expected to conduct your own investigation respecting the potential site, including the demographics of the area. You and Brown must agree on a suitable location for a BROWN's Store before you enter into a Franchise Agreement with Brown. Brown will not enter into a Franchise Agreement with you until a suitable location has been agreed upon.
Franchisee shall not execute a lease which has for any reason been disapproved by Brown. Franchisee shall deliver a copy of the signed lease for the Premises to Brown within fifteen (15) days of its execution. Franchisee shall execute a Collateral Assignment of Lease, attached hereto as Rider B, by which Franchisee assigns to Brown all of his right, title and interest as tenant under the lease for the Store premises. The assignment is for collateral purposes and may be exercised only upon a default by Franchisee under his lease or under this Agreement. Brown's approval of Franchisee's lease is conditioned on receipt of the signed Collateral Assignment.
Franchisee's execution of a lease for a site for the Store shall constitute acceptance by Franchisee of such site and location and of the terms of such lease, sublease or purchase.
Brown's approval of the lease or sublease does not constitute a warranty or representation of any kind, express or implied, as to its fairness, suitability or profitability or as to Franchisee's ability to comply with its terms.
In the event PROSPECTIVE FRANCHISEE withdraws his application for a Franchise after a site has been approved, PROSPECTIVE FRANCHISEE will not be entitled to any refund of the Deposit.
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- Upon termination pursuant to Paragraph 3.d. above, BROWN shall refund PROSPECTIVE FRANCHISEE's Deposit less Three Thousand ($3,000.00) Dollars. Upon termination pursuant to Paragraph 5 above, prior to the approval by BROWN of a site, BROWN shall refund PROSPECTIVE FRANCHISEE's Deposit less Three Thousand ($3,000.00) Dollars. Upon termination pursuant to Paragraph 5 above, subsequent to the approval by BROWN of a site, PROSPECTIVE FRANCHISEE shall not be entitled to any refund of the Deposit. In the event of termination pursuant to Paragraph 3.a. above, BROWN shall refund all of PROSPECTIVE FRANCHISEE's Deposit. The amount withheld by BROWN is to compensate the expenses incurred by BROWN in connection with PROSPECTIVE FRANCHISEE's proposed purchase of a Franchise, including, without limitation, those expenses related to site selection and inspection of a site for PROSPECTIVE FRANCHISEE's Store, travel and living expenses, compensation of employees of BROWN and legal fees and expenses.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 23–24)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Item 11, Section C, addresses the selection of the store location. Browns Chicken considers factors such as proximity to competing stores, traffic patterns, and the cost of the site. The franchisee is expected to conduct their own investigation into the potential site, including demographics. Both Browns Chicken and the franchisee must agree on a suitable location before a Franchise Agreement is signed.
Item 22 discusses contracts related to leasing. The franchisee must not execute a lease that Browns Chicken has disapproved. The franchisee is required to provide Browns Chicken with a copy of the signed lease within 15 days of execution. Additionally, the franchisee must execute a Collateral Assignment of Lease, assigning their rights as a tenant to Browns Chicken, which serves as collateral in case of default. The franchisee's execution of a lease signifies their acceptance of the site and the lease terms. Browns Chicken's approval of the lease does not constitute a warranty regarding its fairness, suitability, or profitability.
Item 6 also mentions site selection, stating that if a prospective franchisee withdraws their application after a site has been approved, they will not be entitled to a refund of their deposit. If termination occurs prior to site approval by Browns Chicken, the prospective franchisee is entitled to a refund of their deposit less $3,000. The amount withheld by Browns Chicken is to compensate for expenses related to site selection and inspection, travel, employee compensation, and legal fees.