What is the Browns Chicken Sublessee required to do if 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 a Sublessee's 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 Sublessor a processing fee of $50.00. Second, the Sublessee must immediately address the reason for the dishonored bank draft. Finally, the Sublessee is obligated to notify the Sublessor that the electronic bank draft will be honored.
This requirement ensures that Browns Chicken, as the Sublessor, is compensated for the administrative burden and potential financial losses incurred due to the dishonored payment. It also compels the Sublessee to promptly resolve the issue and provide assurance that future payments will be honored.
For a prospective Browns Chicken franchisee, this clause highlights the importance of maintaining sufficient funds in the designated bank account to avoid penalties and disruptions in payment processing. Failure to comply with these requirements could potentially lead to further action from Browns Chicken, including potential termination of the sublease agreement.