What sections of the Browns Chicken Franchise Agreement outline the franchisee's advertising obligations?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Brown will maintain and administer an advertising fund (the "Advertising Fund") for such advertising as Brown may deem necessary or appropriate, in its sole discretion (Paragraph A of Section 11 of the Franchise Agreement).
The Franchise Agreement requires you to pay to the Advertising Fund 4% of your Gross Sales. You must pay Brown the Advertising Fund by electronic transfer or automatic bank draft. You must establish an account at a bank acceptable to Brown, execute all documents required by said bank and Brown's bank to effect such transfers, and pay all fees and charges assessed by said banks for such transfers.
Currently, the advertising contribution required is 4% for BROWN'S Stores. Generally, the Advertising Fund does not pay for radio and television advertising programs in a metropolitan or regional area unless the advertising contributions received from BROWN'S Stores in that area can reasonably support such advertising programs.
Brown will from time to time with the assistance of a local advertising agency, formulate, develop, produce and conduct regional advertising and promotion programs in such form and media as Brown determines, in its sole discretion, to be most effective.
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 details the franchisee's advertising obligations. Specifically, Paragraph A of Section 11 of the Franchise Agreement states that Browns Chicken will maintain and administer an advertising fund. Franchisees are required to contribute 4% of their gross sales to this Advertising Fund, payable via electronic transfer or automatic bank draft.
Browns Chicken, with the assistance of a local advertising agency, will formulate, develop, produce, and conduct regional advertising and promotion programs. The form and media of these programs are determined by Browns Chicken in its sole discretion, aiming for maximum effectiveness. However, the advertising contributions received from Browns Chicken stores in a specific metropolitan or regional area must reasonably support radio and television advertising programs in that area.
For a prospective Browns Chicken franchisee, this means they must allocate 4% of their gross sales towards advertising. They will need to set up a bank account that is acceptable to Browns Chicken and authorize electronic transfers for the advertising fund contributions. While Browns Chicken manages the advertising fund and develops the campaigns, the franchisee's contribution directly supports these efforts, particularly at the regional level. The franchisee has limited control over the specific advertising strategies but benefits from the franchisor's expertise and coordinated campaigns.