What constitutes 'Assets' that Burros Fries may purchase from a franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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"). The Franchisee shall advise us in writing within ten (10) days of any such Loss. No such Loss shall relieve the Franchisee of the obligation to pay Royalty Fees and all other amounts owed hereunder. In the event of any such Loss, we, at our option, may: (a) if the Loss has not materially impaired the Business (in our reasonable Business Judgment), require that the Franchisee, upon our demand, place the Business in good condition and repair reasonably satisfactory to us as mentioned above; or (b) if the Loss has materially impaired the Business and it is substantially destroyed, (in our sole judgment), we may require the Franchisee to repair the existing Business or find an alternative location within the Territory within ninety (90) days or soonest possible timeframe according to Franchisee's lease. We may extend this period an additional thirty (30) days at our discretion and failure of Franchisee to comply may result in termination of this Agreement. Upon termination, the Franchisee must return to us the System (including
all materials), and we have the first right of refusal to purchase all Assets (as described in Section 24.G), but any such purchase price will be reduced to account for the Loss the Franchisee incurred.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries' 2024 Franchise Disclosure Document, in the event of damage, loss, theft, or destruction to the business, Burros Fries has the first right of refusal to purchase all 'Assets' from the franchisee. The document refers to Section 24.G for a description of these assets.
However, the provided excerpts do not include Section 24.G or a comprehensive definition of what specifically constitutes 'Assets' that Burros Fries may purchase. Without this definition, prospective franchisees cannot fully understand what property or items Burros Fries might acquire in such a situation.
To gain a clear understanding, a prospective Burros Fries franchisee should ask the franchisor for a detailed list of what 'Assets' encompasses under Section 24.G. This list should specify all tangible and intangible items that Burros Fries could potentially purchase, such as equipment, inventory, and intellectual property.