Under what conditions is the Browns Chicken initial franchise fee refundable?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
The initial franchise fee is fully earned by Brown when paid and is non-refundable, with 2 exceptions. A portion of the deposit is refundable as described in the paragraph above. The second exception is if Brown elects to terminate the franchise due to your failure to complete satisfactorily the training program. In that event, Brown will refund to you any payments made of the initial franchise fee, less the expenses Brown incurred in connection with granting you the franchise and training you and your designees.
In its most recent fiscal year, Brown reduced the franchise fee for 2 franchises, as an incentive to open their stores.
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Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the initial franchise fee is generally non-refundable, but there are two specific exceptions. The standard initial franchise fee is $25,000, with $15,000 paid upon signing a Preliminary Agreement.
The first exception involves the Preliminary Agreement. If a prospective franchisee signs this agreement and pays the $15,000 deposit to secure a location, they have 60 days to find a suitable site. If a site is not located and approved within this timeframe, Browns Chicken will refund the deposit, but will retain $3,000. However, if a site is approved within 60 days, but the franchisee fails to sign the Franchise Agreement within 10 days of approval, the entire $15,000 deposit is forfeited.
The second exception arises if Browns Chicken terminates the franchise agreement because the franchisee fails to complete the training program satisfactorily. In this case, Browns Chicken will refund the initial franchise fee payments, but will deduct expenses incurred for granting the franchise and training the franchisee and their designees. This means the refund will not be a full $25,000, as Browns Chicken will subtract costs they've already incurred. Browns Chicken also reduced the franchise fee for 2 franchises as an incentive to open their stores in its most recent fiscal year.