What sections of the Browns Chicken Franchise Agreement outline the Browns Chicken franchisee's obligations regarding advertising?
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 the 2025 Browns Chicken Franchise Disclosure Document, Item 11, Paragraph A of Section 11 of the Franchise Agreement, outlines the franchisee's obligation to pay into the Advertising Fund. Browns Chicken maintains and administers this fund for advertising they deem necessary. Franchisees are required to contribute 4% of their gross sales to the Advertising Fund, payable via electronic transfer or automatic bank draft. Franchisees must establish an account at a bank acceptable to Browns Chicken and execute all necessary documents for these transfers, covering any associated fees.
Browns Chicken, with the assistance of a local advertising agency, formulates, develops, produces, and conducts regional advertising and promotion programs. These programs utilize various forms and media, selected at Browns Chicken's discretion, to be most effective. However, the Advertising Fund typically does not cover radio and television advertising in metropolitan or regional areas unless the contributions from Browns Chicken stores in that area sufficiently support such programs.
This arrangement means that a significant portion of a franchisee's revenue is allocated to a centralized advertising fund managed by Browns Chicken. While this provides franchisees with the benefit of professionally managed advertising campaigns, it also means they have limited control over how those funds are spent and the specific advertising strategies employed in their region. Prospective franchisees should inquire about the advertising plans for their specific area and the criteria used to determine the allocation of advertising funds.