How does the Browns Chicken sublessor establish the amount of each monthly payment of Taxes?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
To assure the payment by Sublessee of all real estate, personal property, and other taxes and assessments levied upon or with respect to the Premises during the Term, or any portion thereof, of the Lease or this Sublease and for which Tenant is responsible under the Lease ("Taxes"), and the payment of which is hereby undertaken by Sublessee in accordance with Paragraph 7 hereof, Sublessor may require Sublessee to deposit with Sublessor, on the first day of each month of the Term, an amount equal to one-twelfth (l/12th) of the total of all Taxes, the amount of each monthly payment of Taxes to be established by Sublessor on an annual basis, in such amount as Sublessor determines in its reasonable estimation will provide sufficient reserves from which to satisfy the Taxes next becoming due.
The amount of the monthly deposit for Taxes may be adjusted from time to time by Sublessor in the event of a change in the amount of the Taxes, or in the event Sublessor determines that the funds held by it are (or will be) insufficient for the payment of said Taxes.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the sublessor determines the monthly tax payment amount. To ensure the sublessee pays all real estate, personal property, and other taxes related to the premises during the lease term, the sublessor may require the sublessee to deposit one-twelfth of the total annual taxes on the first day of each month.
The Browns Chicken sublessor establishes the amount of each monthly tax payment on an annual basis. This amount is determined by the sublessor's reasonable estimation of what will sufficiently cover the taxes due.
The sublessor can adjust the monthly deposit amount if there is a change in the tax amount or if the sublessor determines that the held funds are insufficient to cover the taxes. This adjustment ensures that the sublessee's payments align with the actual tax obligations for the Browns Chicken location.