Under what conditions can a Browns Chicken franchise be terminated earlier than the stated term?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
eement | | e. Assignment by | Paragraph 7 | You may not assign agreement | | Franchisee | | |
B. FRANCHISE AGREEMENT
| Provision | Section in Agreement | Summary |
|---|---|---|
| (a) Length of the franchise term | 2A | Approximately 15 years, subject to earlier termination as provided in the Franchise Agreement. |
| (b) Renewal or extension of the term | 2B | If you are in compliance with the Franchise Agreement and give 6 months’ notice of your intent to renew prior to the end of the term, Brown will renew the franchise for a 1 year (minimum) or 5 year term (maximum). |
| Provision | Section in Agreement | Summary |
| (c) Requirements for Franchisee to renew or extend | 2B | Compliance with Franchise Agreement and any other agreements, including leases; remodel and update; sign new franchise agreement; pay $5,000 renewal fee. The renewal agreement may contain materially different terms and conditions than your original contract, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees |
| (d) Termination by Franchisee | 20A | Only if you are in compliance with the Franchise Agreement and Brown fails to cure its own material breach within 30 days of written notice. |
| (e) Termination by Franchisor | None | No specific provision. |
| without cause | ||
| (f) Termination by Franchisor with cause | 20B and 21D | Brown can terminate the Franchise if you default under any agreement; upon termination of the Franchise, any sublease from Brown will terminate, and you may be required to assign your lease to Brown. |
| (g) "Cause" defined – curable defaults | 20B | Upon notice as provided in the Franchise Agreement, the following defaults may be curable: failure to complete training, failure to secure a site or retain or develop it according to Brown's specifications, non-payment of fees (unless repeated), failure to operate the Store in compliance with Brown's standards. For Illinois franchisees, Brown must give you a reasonable time franchise to cure, which need not be more than 30 days. If the time frame is less than 30 days, the causes must be related to health and safety. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–38)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the franchise agreement, which typically lasts for approximately 15 years, can be terminated earlier under certain conditions. Browns Chicken can terminate the franchise if the franchisee defaults under any agreement. Upon termination of the Franchise, any sublease from Browns Chicken will terminate, and the franchisee may be required to assign their lease to Browns Chicken.
Defaults that can be cured include failure to complete training, failure to secure a site or retain or develop it according to Browns Chicken's specifications, non-payment of fees (unless repeated), and failure to operate the store in compliance with Browns Chicken's standards. For Illinois franchisees, Browns Chicken must provide a reasonable time to cure the default, which need not be more than 30 days, unless the causes are related to health and safety, in which case the timeframe may be less than 30 days.
Non-curable defaults include filing bankruptcy or making an assignment for the benefit of creditors, abandonment, repeated defaults even if cured, repeated filing of false reports, making unauthorized transfer of franchise, conviction of crime, making material misrepresentations, making unauthorized use of proprietary information, and competition with Browns Chicken. Additionally, if a franchisee violates any provision of the Illinois Gaming Act, their franchise agreement, or the Video Gaming Rider G, Browns Chicken may terminate the Video Gaming Rider G upon 10 days’ notice. If the franchisee fails to sign a franchise agreement within 10 days of Browns Chicken's approval of their site, Browns Chicken may terminate the preliminary agreement.