Who bears the expense for the required upgrades, remodeling, and refurbishment of a Burros Fries Business during renewal?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee promises to promptly accept and implement, in the operation of its Business, all such additions, modifications and changes at Franchisees expense.
During the term of this Agreement, the Accepted Location shall be used exclusively for the purpose of operating a Franchised Business and shall be located within the Territory. In the event the Business shall be damaged or destroyed by fire or other casualty, or be required to be repaired, Franchisee shall commence the required repair of the Business within thirty (30) days from the date of such casualty or notice of such governmental requirement (or such lesser period as shall be designated by such governmental requirement), and shall complete all required repairs as soon as possible thereafter, in continuity, but in no event later than ninety (90) days from the date of such casualty or requirement of such governmental notice. The minimum acceptable appearance for the refurbished Business will be that which existed just prior to the casualty; however, every effort should be made to have the refurbished Business include the then-current image, design and specifications of a Burros & Fries Business.
As between us and the Franchisee, the Franchisee shall bear the entire risk of any damage, loss, theft or destruction to the Business from any cause whatsoever or requisition of the Business by any governmental entity or the taking of title to the Business by eminent domain or otherwise (collectively, "Loss").
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
Based on the 2024 Burros Fries Franchise Disclosure Document, the franchisee is responsible for the costs associated with maintaining and upgrading the business, including any required remodeling or refurbishment. Specifically, the franchisee must accept and implement any modifications or changes to approved products, supplies, kitchen equipment, vendors, and suppliers at their own expense. This obligation extends throughout the term of the agreement.
This means that if Burros Fries decides to update its brand standards or require new equipment, the franchisee will have to pay for these changes. This is a common practice in franchising, as it ensures brand consistency and allows the franchisor to maintain quality control. However, it also means that franchisees need to be prepared for potential expenses related to upgrades and remodeling.
Furthermore, in the event the Burros Fries business is damaged or destroyed, the franchisee is responsible for commencing repairs within 30 days and completing them within 90 days. The refurbished business should meet the appearance standards that existed prior to the damage, with efforts made to incorporate the current image, design, and specifications of a Burros & Fries Business. The franchisee bears the risk of any loss and is still obligated to pay royalty fees and other amounts owed, regardless of any damage or loss to the business.