What specific reports are Browns Chicken franchisees required to furnish to avoid penalties?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Failure to Report Gross Sales and to Furnish Reports and Financial Statements. Franchisee shall pay Brown a penalty of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th) day from the date performance is due, up through and including the day the default is cured, if he fails to report the Gross Sales of the Store, or to furnish the reports and financial statements, as set forth in Paragraph 12.B. by the stated deadlines.
Franchisee shall furnish to Brown in the form prescribed from time to time, using the chart of accounts supplied by Brown: (1) by Tuesday of each week, via email, a report of the Store's Gross Sales for the immediately preceding Monday through Sunday period; (2) within seven (7) days after the end of each Monthly Period (as defined below), a report of Gross Sales of the Store for such Monthly Period and such other data, information and supporting records as Brown from time to time requires; (3) within thirty (30) days after the end of each Monthly Period, an unaudited balance sheet and statement of profit and loss and financial condition of the Store for such Monthly Period, prepared by an independent certified public accountant; (4) within sixty (60) days after the end of Franchisee's fiscal year, a fiscal year-end balance sheet and an annual profit and loss statement for such fiscal year, reflecting all year-end adjustments;
and (5) within 105 days after the end of Franchisee's fiscal year, a copy of Franchisee's federal and state tax returns as filed with each taxing authority.
Each report and financial statement required by this Section 12 shall be verified and signed by Franchisee in the manner prescribed by Brown. Franchisee agrees to maintain and furnish, on request by Brown, complete copies of federal and state income tax returns filed by Franchisee with the Internal Revenue Service and state tax departments reflecting sales and income of the Store or the corporation or partnership that holds the Franchise.
Franchisee shall furnish Brown the identity and contact information for Franchisee's accountant. Franchisee hereby consents, authorizes, and instructs Franchisee's accountant to furnish Brown, upon written request of Brown, copies of Franchisee's financial records, sales information, financial reports, or any other data in the possession of the Franchisee's accountant, relating to Franchisee's business.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees must submit several reports and financial statements to avoid monetary penalties. Failure to report gross sales or furnish the required reports and financial statements by the stated deadlines results in a penalty of $100 per day, beginning 15 days after the due date, until the default is resolved.
Specifically, Browns Chicken requires franchisees to furnish the following reports: a weekly report of the store's gross sales, submitted via email by Tuesday of each week, covering the period from the immediately preceding Monday through Sunday; a report of gross sales for each monthly period, along with other data, information, and supporting records, within seven days after the end of each monthly period; an unaudited balance sheet and statement of profit and loss and financial condition of the store for each monthly period, prepared by an independent certified public accountant, within 30 days after the end of each monthly period; a fiscal year-end balance sheet and an annual profit and loss statement for the fiscal year, reflecting all year-end adjustments, within 60 days after the end of the franchisee's fiscal year; and a copy of the franchisee's federal and state tax returns as filed with each taxing authority, within 105 days after the end of the franchisee's fiscal year.
These reports must be verified and signed by the franchisee in the manner prescribed by Browns Chicken. Franchisees must also maintain and furnish, upon request, complete copies of federal and state income tax returns filed with the IRS and state tax departments, reflecting sales and income of the store or the corporation or partnership that holds the franchise. Browns Chicken also requires franchisees to furnish the identity and contact information for the franchisee's accountant and authorizes Browns Chicken to request copies of the franchisee's financial records, sales information, financial reports, or any other data from the accountant.