Is Burros Fries allowed to sell kitchen equipment if they choose to develop it in the future?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
m price or pay a reasonable referral fee.
Any rights not expressly granted to you are reserved to us. Such rights reserved to us include, but are not limited to:
- (1) Advertise, market and sell Burros & Fries branded products other than those sold by our System (including menu and retail items), kitchen equipment (if we choose to develop kitchen equipment in the future);
- (2) Advertise and offer products (including menu and retail items) and services to promote the System through the Internet and/or other similar venues no matter where the person is based to brand the System and/or fulfill demand anywhere;
- (3) Sell, distribute or offer anywhere products (including menu and retail items), kitchen equipment (if we choose to develop kitchen equipment in the future) or services to anyone from anywhere through any alternative or other channel of distribution, other than local Burros & Fries Businesses providing products (including menu and retail items) and services whether or not we are using the Marks or System and on any terms we deem appropriate. We have this right whether or not we are using the Marks or System; or are acting inside or outside your Territory as designated on your Franchise
Agreement;
- (4) Develop and distribute any proprietary products and kitchen equipment (if we choose to develop kitchen equipment in the future) that have been branded with our Mark or logo or different branded products through any outlet located anywhere (including, by way of illustration, supermarkets, specialty food stores, discount club chains, retail stores, over the Internet and/or similar venues) and on any terms and conditions we deem appropriate.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the company retains the right to sell kitchen equipment should they choose to develop it in the future. This is explicitly stated as one of the rights Burros Fries reserves for itself.
This means that as a franchisee, you would not have exclusive rights to sell Burros Fries-branded kitchen equipment, even within your designated territory. Burros Fries could sell such equipment through other channels, such as online or through other distributors, without providing you with any compensation.
The FDD clarifies that the franchise agreement does not grant franchisees the right to sell or distribute kitchen equipment through alternative channels without the company's permission. Furthermore, franchisees are not entitled to a share of the proceeds from Burros Fries's activities through these alternative channels of distribution. This underscores that Burros Fries maintains control over the distribution of kitchen equipment and other products outside of the traditional franchise model.
This arrangement is fairly common in franchising, where the franchisor often retains control over key aspects of the brand and supply chain to ensure consistency and quality. However, it's important for prospective franchisees to understand that this could limit their potential revenue streams and create competition from the franchisor itself.