Under what circumstances can the lease for a Browns Chicken premises be assigned to Brown?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
shall have, at its option, ten (10) days after receipt of notice to cure such default and be substituted for Franchisee as lessee under the lease; and (3) the premises shall be used only for a BROWN Store. The lease for the Premises shall provide further for its assignment to Brown, at Brown's option, upon the termination of this Agreement by Brown in accordance with the terms of this Agreement, or by Franchisee without cause as provided in Paragraph A of Section 20 of this Agreement. The lease shall contain substantially the following provisions:
"Anything contained in this lease to the contrary notwithstanding, Lessor agrees that, without its consent, this lease and the right, title and interest of the Lessee thereunder, may be assigned by the Lessee to Brown's Chicken, LLC, an Illinois limited liability company, or its designee, provided that said Brown's Chicken, LLC or its designee shall execute such documents evidencing its agreement to thereafter keep and perform, or cause to be kept or performed, all of the obligations of the Lessee arising under this lease from and after the time of such assignment."
"Lessor agrees that Lessor shall, upon written request of Brown's Chicken, LLC, disclose to said limited liability company, all reports, information or data in Lessor's possession with respect to sales made in, upon or from the leased premises."
"Lessor shall give written notice to Brown's Chicken, LLC, an Illinois limited liability company (concurrently with the giving of such notice to Lessee), of any default by Lessee under the lease and the said Brown's Chicken, LLC shall have, after the expiration of the period during which the Lessee may cure such default, an additional thirty (30) days to cure, at its sole option, any such default."
"Lessor agrees it will not, without the prior written consent of Brown's Chicken, LLC, modify or terminate this lease.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, there are several circumstances under which the lease for a Browns Chicken premises can be assigned to Browns Chicken, LLC. If the franchise is terminated by Browns Chicken in accordance with the terms of the Franchise Agreement, or by the franchisee without cause as outlined in Paragraph A of Section 20 of the agreement, Browns Chicken has the option to have the lease assigned to them. Additionally, Browns Chicken requires the franchisee to execute a Collateral Assignment of Lease, which assigns all the franchisee's rights, title, and interest as a tenant to Browns Chicken. This assignment serves as collateral and can be exercised if the franchisee defaults under the lease or the Franchise Agreement.
Furthermore, in the event the franchisee owns the real estate where the Browns Chicken store is located, Browns Chicken has the right to require the franchisee to enter into a lease with Browns Chicken. Browns Chicken will then sublease the premises back to the franchisee under the same terms and conditions as the lease, provided the franchisee complies with the Franchise Agreement. If the franchisee defaults under the Franchise Agreement, Browns Chicken can terminate the sublease and take possession of the premises or sublease them to another party.
These provisions ensure that Browns Chicken maintains control over the location of its franchises and can protect its interests in the event of a franchisee's default or termination of the agreement. The franchisee must also obtain Browns Chicken's approval for any lease and deliver a copy of the signed lease to Browns Chicken within fifteen days of its execution. Browns Chicken also has the right to receive notice from the landlord of any default by the franchisee, with an opportunity to cure the default and be substituted as the lessee. These measures are in place to safeguard Browns Chicken's brand and operational consistency.