Can Browns Chicken terminate the Preliminary Agreement if the Prospective Franchisee fails to locate an acceptable site?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- d.
If PROSPECTIVE FRANCHISEE shall be unable to locate an acceptable site within the time above specified, BROWN may, at any time thereafter, terminate this Preliminary Agreement provided it shall refund a portion of the Deposit as provided in Paragraph 6 below.
- e.
Upon termination pursuant to Paragraph 3.d. above, BROWN shall refund PROSPECTIVE FRANCHISEE's Deposit less Three Thousand ($3,000.00) Dollars.
Source: Item 23 — RECEIPT (FDD pages 43–202)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken has the right to terminate the Preliminary Agreement if the prospective franchisee cannot find a suitable site within a specified timeframe. The prospective franchisee is obligated to locate a site acceptable to Browns Chicken within sixty days.
Browns Chicken will provide the prospective franchisee with written criteria for site selection upon the execution of the Preliminary Agreement. If the prospective franchisee fails to locate an acceptable site within the given timeframe, Browns Chicken can terminate the agreement.
Upon termination due to the franchisee's failure to find a site, Browns Chicken will refund the franchisee's deposit, less $3,000. This amount is intended to cover expenses incurred by Browns Chicken in connection with the proposed franchise purchase, including costs related to site selection, inspection, travel, employee compensation, and legal fees.