Does Burros Fries allow franchisees to operate their business outside of their assigned territory?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
tate the terms of the applicable territory (a separate Franchise Agreement is required for each additional Business as defined in Section 9.D of this Agreement).
Franchisee must operate its Business within the specific Territory as identified in this Section VI. Franchisee may not open a Business at any other location other than the Accepted Location that has been set forth in this Agreement or made a part hereof by an addendum attached to this Agreement. Franchisee
may accept business, service guests and sell Products to anyone who comes from anywhere so long as the Products are being sold from the Accepted Location within its Territory. However, Franchisee can only provide Services within its Territory. Franchisee may perform Services outside its Territory, away from its facility (as described below). We, company-owned locations, other franchisees reserve the same right to sell Products and serve anyone who comes from anywhere. Franchisee is prohibited from selling Products through any alternative channels of distribution (such as Websites as defined below) without our written approval. If Franchisee is granted permission to sell Products through an alternative channel of distribution, per our written approval, Franchisee may sell Products to anyone from anywhere without compensation to another franchisee or company-owned business. Our response to Franchisee's request will be made by email or any other form of written communication within thirty (30) days after we receive it. Approval may be revoked in our sole discretion.
Franchisee is not restricted as to the geographic area into which Franchisee may attract guests for its Business and Franchisee is encouraged to directly advertise and market within its Territory however, Franchisee cannot perform any target marketing ("Target Marketing") into any other territory of another franchisee or company-owned business. The term "Target Marketing" means a concerted effort by a Franchisee to solicit and obtain business by any type of advertising or marketing directed at all or a portion of another franchisee's territory, company-owned business area or unassigned area. We shall use commercially reasonable efforts to deal with any Franchisee that violates this policy. Failure of Franchisee to refrain from Target Marketing, as described above, may result in termination of this Agreement as specified in Section 23.C.
If Franchisee is asked to conduct business at an off-site event (such as: community events, consumer shows, festivals, expos, etc.) or perform Services outside its Territory in which there is another franchise or company-owned business, Franchisee must immediately refer that request to the franchisee in that geographical area or directly to us. Franchisee must not conduct business at any off-site event or perform any Services outside its Territory if another franchise or company-owned business is operating in that area.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are generally required to operate their business within their assigned territory. The FDD specifies that a franchisee must operate its Burros & Fries business within the specific territory outlined in the franchise agreement and cannot open a business at any other location without prior approval.
However, Burros Fries franchisees may conduct business at off-site events or perform services outside their territory under certain conditions. If another franchise or a company-owned business exists in the area where the off-site event is requested, the franchisee must refer the request to that franchise or to Burros Fries directly. The franchisee can only proceed with the off-site event or services if the other franchise or Burros Fries determines it is in the best interest of the person or business making the request. If there is no existing Burros & Fries business in that area, the franchisee can proceed with the off-site event or services but must be prepared to refer the business to another franchisee if the area is later assigned.
It's important to note that Burros Fries retains the right to modify or eliminate a franchisee's territorial exclusivity as an alternative to terminating the franchise agreement if the franchisee defaults. Additionally, if a franchisee cannot promptly provide products or services due to excessive work or other causes, they must refer the person or business to another franchise, company-owned business, or to Burros Fries. Failure to comply with these provisions regarding target marketing and referrals can result in termination of the agreement or modification of the franchisee's territorial rights.