Under what conditions can Browns Chicken terminate the franchise agreement with cause?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary |
|---|---|---|
| (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. |
| (h) "Cause" defined –non-curable defaults | 20B | 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, competition with Brown. |
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, Browns Chicken can terminate the franchise agreement with cause under several conditions, as detailed in Sections 20B and 21D of the agreement. These conditions fall into two main categories: curable defaults and non-curable defaults. If a franchisee defaults under any agreement with Browns Chicken, the franchise can be terminated, and any sublease from Browns Chicken will also terminate, potentially requiring the franchisee to assign their lease to Browns Chicken.
Curable defaults, which Browns Chicken must provide notice for and an opportunity to correct, include failing to complete required training, failing to secure or properly develop a site according to Browns Chicken's specifications, non-payment of fees (unless it's a repeated issue), and failure to operate the store in compliance with Browns Chicken's standards. For franchisees in Illinois, Browns Chicken must provide a reasonable cure period, which must be at least 30 days unless the cause is related to health and safety.
Non-curable defaults, which allow for immediate termination without an opportunity to cure, include filing for bankruptcy or making an assignment for the benefit of creditors, abandonment of the franchise, repeated defaults even if they were previously cured, repeated filing of false reports, making unauthorized transfers of the franchise, conviction of a crime, making material misrepresentations, making unauthorized use of Browns Chicken's proprietary information, or competing with Browns Chicken. These stipulations are important for prospective franchisees to understand, as they outline the specific actions that could lead to the termination of their franchise agreement and the loss of their investment.