What is the transfer fee required by Browns Chicken for a franchise transfer?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
same royalty fees and advertising contributions provided herein and for a term equal to the remaining term of this Agreement); (5) if Brown determines that training is required, Brown may charge Franchisee or the transferee a training fee in an amount equal to twenty percent (20%) of the initial franchise fee then customarily charged by Brown for Brown's franchises; (6) Franchisee or the transferee must pay Brown a transfer fee in the amount of Five Thousand Dollars ($5,000); (7) Franchisee and its owners must execute a general release, in form satisfactory to Brown, of any and all claims against Brown, its affiliates and their officers, directors, employees and agents; (8) Brown must approve the material terms and conditions of such transfer, including, without limitation, that the price and terms of payment are not so burdensome as to adversely affect the operation of the Store by the transferee; (9) if Franchisee finances any part of the sale price of the transferred interest, Franchisee and its owners agree that all obligations of the transferee under or pursuant to any promissory notes, agreements or security interests reserved by Franchisee or its owners in the assets of the Store or the Premises shall be subordinate to: (a) the obligations of the transferee to pay royalty fees, advertising contributions and other amounts due to Brown and its affiliates, and otherwise to comply with this Agreement or the franchise agreement executed by the transferee; and (b) the collateral security interest of Brown in the lease of the Premises;
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a franchisee must pay a transfer fee of $5,000 to Browns Chicken when transferring ownership of their franchise. This fee is payable to Browns Chicken, not to the buyer of the franchise.
In addition to the $5,000 transfer fee, if the potential buyer of the franchise had prior contact with Browns Chicken regarding a franchise opportunity before contacting the franchisee, the franchisee must pay Browns Chicken an additional fee. This additional fee is equal to 10% of the gross sales price of the franchise sale, but it will not exceed the then-current initial franchise fee.
It is important to note that the transfer is contingent upon meeting several conditions, including the transferee's business experience, financial resources, and agreement to complete Browns Chicken's training. The franchisee must also settle all outstanding debts with Browns Chicken before the transfer can proceed. Browns Chicken must also approve the transfer's terms and conditions.