Is any value attributed to goodwill or the assignment of the lease when Browns Chicken purchases a Browns Chicken franchise?

According to the 2025 Browns Chicken Franchise Disclosure Document, when Browns Chicken purchases a store, no value is attributed to goodwill or the assignment of the lease. The purchase price for the store, excluding signage (which is valued at $100), is determined at Brown's option, based on either the Book Value or the fair market value of the Purchased Assets.

Book Value is defined as the net book value of the Purchased Assets, as disclosed by the last monthly statement submitted to Browns Chicken before termination or expiration, depreciated on a straight-line basis. Browns Chicken may exclude any inventory, equipment, fixtures, furniture, signs, cash registers, modems, fax machines, computers, or leasehold improvements not acquired in compliance with the Franchise Agreement from the Purchased Assets.

Fair market value is determined by a neutral appraiser selected by two appraisers, one chosen by Browns Chicken and one by the franchisee. The fees and costs of the neutral appraiser are shared equally between Browns Chicken and the franchisee. This ensures a fair valuation of the assets without considering intangible factors like goodwill or lease assignments.

This policy protects Browns Chicken from overpaying for a store based on its reputation or location, and it provides a clear and objective method for determining the purchase price based on the tangible assets of the store. For a prospective franchisee, this means that the resale value of their franchise to Browns Chicken will primarily depend on the depreciated value or appraised fair market value of the physical assets, rather than the store's brand recognition or lease terms.