Does the Burros Fries franchise agreement contain a clause regarding 'Force Majeure'?
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
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
The 2024 Burros Fries Franchise Disclosure Document's Item 22 discusses various aspects of the franchise agreement but does not explicitly mention a 'Force Majeure' clause. However, it does address potential 'Loss' scenarios affecting the Burros Fries business.
Specifically, the franchise agreement stipulates that the franchisee bears the entire risk of any damage, loss, theft, or destruction to the business, regardless of the cause. This includes events like governmental requisition or eminent domain. The franchisee is required to notify Burros Fries in writing within ten days of any such loss.
In the event of a loss, Burros Fries has the option to either require the franchisee to repair the business if the loss hasn't materially impaired it, or, if the business is substantially destroyed, require the franchisee to repair the existing business or find an alternative location within the territory within ninety days (with a possible 30-day extension). Failure to comply may result in termination of the agreement. Upon termination, the franchisee must return the System materials, and Burros Fries has the first right of refusal to purchase the assets, with the purchase price reduced to account for the loss the franchisee incurred.
While not explicitly labeled 'Force Majeure,' these provisions outline how certain disruptive events are handled under the Burros Fries franchise agreement, allocating risk to the franchisee while providing the franchisor with options for business continuity or termination.