Under what conditions can Browns Chicken require a franchisee to close their Restaurant?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
(17) defaults under or violates any term of any other franchise agreement, lease or other agreement with Brown;
(18) has any member of its management staff who has not been certified by the Health Department or has failed to maintain "Health Department-certified management" status;
(19) receives three (3) consecutive scores under eighty percent (80%) on restaurant inspections conducted by Brown;
(20) is consistently issued warnings or is closed by the Local Health Department, and fails to take necessary action to correct cited violations;
(21) fails or refuses to comply with any other mandatory specification, standard, operating procedure or rule prescribed by Brown relating to recipes, quality of food products, methods and procedures for preparing and serving food products, or cleanliness and sanitation of the Store, mandatory uniform policies, and does not correct such failure or refusal within seven (7) days after written notice thereof (which shall describe the corrective action that Franchisee must take) is delivered to Franchisee;
(22) is the subject of repeated customer complaints that Franchisee, Franchisee's employees, or the environment of Franchisee's Store are offensive or derogatory in their speech, conduct or appearance, reflecting or suggesting discrimination about religion, race, gender, age, disability, or other human characteristic, and Franchisee has failed to appropriately address and remedy the conditions underlying such complaints.
(23) Franchisee or any of its owners fails to comply with the covenants contained in Section 15 of this Agreement;
(24) Upon the death or permanent incapacity of Franchisee or owner of a controlling interest in Franchisee, an approved transfer is not effected as provided in Section 14 of this Agreement;
(25) Franchisee fails to timely pay any lender to whom Brown has guaranteed Franchisee's obligations, or Brown if Franchisee has entered into a financing arrangement with Brown:
- a. more than three (3) times if the defaults are cured, or
- b. one (1) time if the default is not cured during the financing term;
(26) Franchisee fails to timely pay any vendors, suppliers, or landlord more than three (3) times during the term of the franchise;
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, there are several conditions under which Browns Chicken can require a franchisee to close their restaurant. These include defaults or violations of any franchise agreement, lease, or other agreement with Browns Chicken. Additionally, if any member of the management staff is not certified by the Health Department or fails to maintain "Health Department-certified management" status, Browns Chicken can mandate closure.
Furthermore, Browns Chicken can require closure if a franchisee receives three consecutive scores under 80% on restaurant inspections conducted by Browns Chicken. Consistent warnings or closures by the Local Health Department, coupled with a failure to correct cited violations, also constitute grounds for mandated closure. Non-compliance with mandatory specifications, standards, operating procedures, or rules related to recipes, food quality, preparation methods, cleanliness, sanitation, or uniform policies, if uncorrected within seven days of written notice, can also lead to closure.
Repeated customer complaints about offensive or discriminatory speech, conduct, or appearance by the franchisee, their employees, or the store environment, without appropriate remediation, can result in closure. Failure to comply with the exclusive relationship covenants outlined in Section 15 of the agreement is another cause. Additionally, failure to effect an approved transfer upon the death or permanent incapacity of the franchisee or owner of a controlling interest can lead to closure.
Finally, Browns Chicken can mandate closure if the franchisee fails to timely pay any lender to whom Browns Chicken has guaranteed the franchisee's obligations more than three times if the defaults are cured, or even one time if the default is not cured during the financing term. Similarly, failure to timely pay vendors, suppliers, or the landlord more than three times during the franchise term can result in the restaurant's closure.