What agreements must a Burros Fries franchisee have substantially complied with to be eligible to transfer the franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
In addition, the Franchisee must submit copies of the draft Asset Purchase Agreement or Ownership Purchase Agreement, all draft Promissory Notes, and Security Agreements, with the transferee, regardless of whether they are Franchisee financed or lender financed. In addition to all other grounds for rejection, we have the right to reject any proposed purchase of the assets of the Franchised Business or any type of ownership interest in the Franchisee or Franchised Business on the grounds that the proposed transferee has, in our sole opinion, taken on too much debt.
Franchisee and its Owners and/or Principals will agree not to compete, not to divert business, or attempt to hire employees, after the transfer in accordance with restrictions acceptable to us and substantially similar to those described in Section 19.C of this Agreement; and
Franchisee and its Owners and/or Principals will not directly or indirectly at any time or in any manner (except with respect to other Burros & Fries Business that Franchisee or its Principals own and operate) identify itself or any business as a current or former Burros & Fries business owner or as one of our franchise owners; use any Mark, any colorable imitation of a Mark, or other indicia of a Burros & Fries Business in any manner or for any purpose; or utilize for any purpose any trade name, trade or service mark or other commercial symbol that suggest or indicates a connection or association with us as described in Sections 24.A and 24.C of this Agreement.
In addition, with respect to all credit card transactions and guest information obtained through credit card usage, Franchisee agrees to diligently comply with all laws and rules regarding such usage and Franchisee will protect the privacy of credit card users. Franchisee must be at all times in compliance with the Payment Card Industry Data Security Standards ("PCI Compliant"). Copies of any and all notices, inspection reports or other communication from any governmental entity with respect to the conduct your Business which indicates the Franchisee's failure to meet or maintain governmental standards, or less than substantial compliance by the Franchisee with any applicable law, rule or regulation, shall be forwarded to us within five (5) days of the Franchisee's receipt thereof. Franchisee agreesto indemnify us under Section 18 of this Agreement which includes any claims arising out of Franchisee's failure to perform its obligations as described above.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
Based on the 2024 Burros Fries Franchise Disclosure Document, a franchisee looking to transfer their franchise must adhere to several stipulations. The franchisee must submit copies of the draft Asset Purchase Agreement or Ownership Purchase Agreement, including all draft Promissory Notes and Security Agreements, with the transferee, irrespective of whether the financing is franchisee-financed or lender-financed. Burros Fries retains the right to reject any proposed purchase if, in their opinion, the proposed transferee has taken on too much debt.
Furthermore, after the transfer, the franchisee, along with their Owners and/or Principals, must agree not to compete with Burros Fries, divert business, or attempt to hire employees, adhering to restrictions similar to those outlined in Section 19.C of the Franchise Agreement. They must also agree not to identify themselves or any business as a current or former Burros Fries business owner or franchise owner, or use any Marks or imitations thereof, except for other Burros & Fries Businesses they may own and operate.
In addition, the franchisee must comply with all laws and rules regarding credit card transactions and guest information obtained through credit card usage, protecting the privacy of credit card users and maintaining compliance with the Payment Card Industry Data Security Standards (PCI Compliant). The franchisee must also forward copies of any notices, inspection reports, or other communication from any governmental entity indicating a failure to meet or maintain governmental standards or less than substantial compliance with any applicable law, rule, or regulation within five days of receipt. These stipulations ensure that the transfer process is conducted responsibly and in accordance with Burros Fries' standards and legal requirements.