Will Browns Chicken unreasonably withhold approval of sites that meet its standards?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
all be the obligation of PROSPECTIVE FRANCHISEE to locate, within sixty (60) days
- a. The Area is not exclusive or protected either during the term of this Agreement or in the event a franchise is granted. BROWN has the right to offer and grant a franchise to any other party within the Area. In the event BROWN grants a franchise to another party within the Area during the term of this Agreement, PROSPECTIVE FRANCHISEE may terminate this Agreement and obtain a refund of the Deposit as provided in Paragraph 6 below.
- b. BROWN shall not unreasonably withhold approval of sites that meet its standards for general location, physical and demographic characteristics of the neighborhood, traffic pattern, parking, competition, proximity to other businesses (including other Stores), the nature of other businesses in proximity to the site, layout and other physical characteristics, rental, lease duration and other lease terms and conditions for the Store.
- c. Upon execution of this Agreement, BROWN will furnish PROSPECTIVE FRANCHISEE in writing criteria for site selection, which materials must be returned to BROWN upon termination of this Agreement.
- d. If PROSPECTIVE FRANCHISEE shall be unable to locate an acceptable site within the time above specified, BROWN may, at any time thereafter, terminate this Preliminary Agreement provided it shall refund a portion of the Deposit as provided in Paragraph 6 below.
- e. PROSPECTIVE FRANCHISEE acknowledges and agrees that BROWN's approval of the premises for the Store and any information communicated to PROSPECTIVE FRANCHISEE regarding the premises for the Store do not constitute a representation or warranty of any kind, expressed or implied, as to the suitability of the premises for a Brown's Store or for any other purpose. BROWN's approval of the premises indicates only that BROWN believes that the premises falls within the acceptable criteria established by BROWN as of the time period encompassing the evaluation.
Source: Item 23 — RECEIPT (FDD pages 43–202)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken will not unreasonably withhold approval of sites that meet its standards. The FDD states that Browns Chicken's standards include general location, physical and demographic characteristics of the neighborhood, traffic patterns, parking, competition, proximity to other businesses (including other Browns Chicken stores), the nature of other businesses near the site, layout and other physical characteristics, rental, lease duration, and other lease terms and conditions for the store.
However, the document also clarifies that Browns Chicken's approval of a site does not constitute a warranty of its suitability or potential. The FDD acknowledges that the criteria used to evaluate sites may not accurately predict the potential of all locations, and demographic or economic factors could change after approval, affecting the site's performance. Browns Chicken is not responsible if an approved site fails to meet a franchisee's expectations regarding revenue or operational criteria.
Prospective franchisees are expected to conduct their own independent investigation of a site's suitability before accepting a franchise. This includes assessing the factors Browns Chicken considers, as well as any other elements the franchisee believes are relevant to the success of the location. Franchisees should be aware that Browns Chicken's approval only indicates that the site met their criteria at the time of evaluation, and future performance is not guaranteed.
In summary, while Browns Chicken agrees not to unreasonably withhold approval of sites meeting its standards, franchisees bear the ultimate responsibility for ensuring the chosen location aligns with their expectations and business goals. The FDD emphasizes the importance of independent due diligence and acknowledges the inherent uncertainties in predicting a site's long-term potential.