What are the consequences if a Burros Fries franchisee fails to pay royalty fees when due?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
n obtaining injunctive or other relief for the enforcement of any provisions of Sections 19 and 24.
25. PROVISIONS RELATING TO ENFORCEMENT
A. Franchisee May Not Withhold Payments Due Franchisor
Franchisee agrees that he or she will not withhold payments of any Royalty Fees, System Advertising Fees or any other amounts of money owed to us for any reason, on grounds of alleged nonperformance by us of any obligation. All such claims by Franchisee shall, if not otherwise resolved by us and Franchisee, be submitted to mediation and/or arbitration as provided in this Agreement. The Franchisee has no right of offset, or set off to any amounts due and owing to us.
B. Severability
All provisions of this Agreement are severable, and this Agreement shall be interpreted and enforced as if all completely invalid or unenforceable provisions were not contained herein, and any partially valid and enforceable provisions shall be enforced to the extent valid and enforceable. If any applicable law or rule requires a greater prior notice of the termination of this Agreement than is required hereunder, or requires the taking of some other action not required hereunder, the prior notice or other action required by such law or rule shall be substituted for the notice or other requirements.
C.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, a franchisee cannot withhold royalty fee payments, system advertising fees, or any other amounts owed to Burros Fries due to alleged nonperformance by Burros Fries. All claims by the franchisee must be submitted to mediation or arbitration if not resolved otherwise. The Burros Fries franchisee does not have the right to offset or set off any amounts due to Burros Fries.
If a Burros Fries franchisee fails to pay the required system advertising fees, it is considered a material breach of the agreement. This subjects the franchisee to all legal remedies and those specified in the agreement. Burros Fries has the right to remove the franchisee from advertising or marketing materials without notice if system advertising fees are not paid on time.
Additionally, upon termination or expiration of the franchise agreement, the franchisee is obligated to pay all outstanding royalty fees, system advertising fund fees, other advertising fees, payments, or any other sums owed to Burros Fries or its affiliates within 30 days. The franchisee is also responsible for covering all damages, costs, and expenses, including reasonable attorney's fees, incurred by Burros Fries in obtaining injunctive or other relief to enforce Sections 19 and 24 of the agreement.