Does Burros Fries have to approve the terms of the lease in writing?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee may buy or lease the required real property and improvements from any source and on terms approved by us in writing. Franchisee may not sign a lease (or a contract to purchase the premises, if applicable) for the Business until Franchisee has obtained our written approval. Franchisee must not invest any monies for a site in which Franchisee wishes to open a Business until Franchisee has obtained our written approval for the site which will be made by email or any other form of written communication. On the execution of any lease for the Franchise Business, Franchisee will deliver to us a copy of the executed lease and an option to assume the lease executed by the lessor in favor of us in a form acceptable to us.
Franchisee shall not execute a lease or sublease for the Business, or make any modifications or amendments to the lease or sublease, without our prior written consent, which we may grant, condition or withhold in our Business Judgment. Franchisee will deliver to us a copy of any lease or sublease for our review at least ten (10) days before execution. Franchisee must deliver a copy of the signed lease or sublease to us within five (5) business days after it is signed. Franchisee shall ensure that the lease or sublease for the Business contains, in an addendum or otherwise, the following provisions which:
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- Permit Franchisee to operate a Burros & Fries Business in accordance with this Agreement and the Manuals;
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- Provide that the site will be used only for the operation of a Burros & Fries Business, and prohibit Franchisee from assigning or modifying any of Franchisee's lease rights, or extending the term without our prior written consent;
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- Require the lessor to concurrently provide us with a copy of any written notices of default to Franchisee under the lease and give us the right to cure any default if weso choose; within fifteen (15) days following the expiration of the Franchisee's cure period under the lease;
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- Provide us with a right to take assignment and possession of the Business, without the lessor's consent or any additional consideration. If we exercise this right and Franchisee is in good standing, we'll sign a sublease with Franchisee for the same rent Franchisee is paying. In any case, we won't have any liability for any obligations incurred prior to our occupancy. Franchisee agrees to take whatever actions are necessary to accomplish such assignment and will, when you sign this Agreement, also sign the Collateral Assignment of Lease attached as Schedule 6.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, a franchisee must obtain written approval from Burros Fries before signing a lease or purchase contract for the business premises. This approval is required whether the franchisee is leasing or buying the property. Furthermore, before investing any money in a potential site, the franchisee must first receive written approval for the site from Burros Fries, which will be communicated via email or other written means.
Burros Fries requires that franchisees deliver a copy of any lease or sublease for review at least ten days before it is signed. After the lease or sublease is signed, a copy must be delivered to Burros Fries within five business days. The franchisee is responsible for ensuring that specific provisions are included in the lease, either in an addendum or otherwise. These provisions must allow the franchisee to operate a Burros & Fries business according to the franchise agreement and manuals, restrict the site's use solely to a Burros & Fries business, and prevent the franchisee from assigning or modifying lease rights or extending the term without prior written consent from Burros Fries.
The lease must also require the lessor to provide Burros Fries with copies of any default notices sent to the franchisee and grant Burros Fries the right to cure any default within fifteen days after the franchisee's cure period expires. Additionally, the lease should give Burros Fries the right to take assignment and possession of the business without the lessor's consent or additional consideration. If Burros Fries exercises this right and the franchisee is in good standing, Burros Fries will sign a sublease with the franchisee at the same rent the franchisee was paying. The franchisee must also sign a Collateral Assignment of Lease when signing the Franchise Agreement.