What is the Browns Chicken Sublessee required to do after an electronic bank draft is dishonored?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
shall establish and maintain a bank account for the purpose of making payments to Sublessor. Sublessee shall execute such documents as may be required from time to time by Sublessor to permit Sublessor to withdraw from Sublessee's general operating checking account the amounts due Sublessor. Sublessee may not make any change in its banking
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, if an electronic bank draft is declined, dishonored, or refused due to insufficient funds, the Sublessee must take specific actions. First, the Sublessee is required to pay Browns Chicken a processing fee of $50.00. Second, the Sublessee must immediately address the reason the bank draft was dishonored. Finally, the Sublessee is obligated to notify Browns Chicken that the electronic bank draft will be honored.
This requirement ensures that Browns Chicken is compensated for the administrative burden and potential financial losses associated with dishonored payments. It also places the responsibility on the Sublessee to promptly resolve any banking issues and communicate the resolution to Browns Chicken, maintaining transparency and accountability in financial transactions.
For a prospective Browns Chicken franchisee, this means maintaining sufficient funds in the designated bank account to avoid dishonored payments. Failure to do so can result in additional fees and the need for immediate corrective action. Additionally, the franchisee should ensure they have a reliable communication system to promptly notify Browns Chicken once the issue is resolved, as required by the franchise agreement.