What is the Franchisee required to do with their Pre-Existing Business when converting to a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
b. Employ or seek to employ any person who is at the time employed by us or any franchisee or developer of ours, or otherwise directly or indirectly induce such persons to leave that person's employment.
- c. Directly or indirectly, for yourself or through, on behalf of or in conjunction with any person, partnership or corporation, own, maintain, operate, engage in or have any financial or beneficial interest in (including interest in corporations, limited liability companies, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to, any business which is the same as or similar to the Burros & Fries Business including, but not limited to, the offering of products and services that are similar to the Products and Services which have been offered through the Business or is intended to be, located within a ten (10) mile radius of the Approved Location in the Franchise Agreement or of any Burros & Fries business (which includes companyowned businesses and/or other franchise businesses) in existence or under construction as of the expiration or termination of, or the transfer of all or your interest in, the Franchise Agreement.
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- You undertake to use your best efforts to ensure that your staff acts as required by this Agreement.
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Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
The 2024 Burros Fries Franchise Disclosure Document outlines restrictions on franchisees regarding involvement in similar businesses. Specifically, a franchisee cannot directly or indirectly own, operate, or have a financial interest in any business that is the same as or similar to a Burros & Fries Business. This restriction includes offering similar products and services within a 10-mile radius of the approved Burros Fries location or any other existing or under-construction Burros Fries business.
This non-compete clause is in effect during the term of the Franchise Agreement and applies to company-owned businesses and other franchise businesses. The franchisee must also ensure their staff adheres to the terms of the agreement. Burros Fries emphasizes that any breach of this agreement would cause irreparable injury, entitling them to legal remedies such as injunctions and specific performance, in addition to any other available legal or equitable remedies.
Furthermore, Burros Fries retains the right to engage in transactions such as brand conversions to or from the Burros Fries Marks and System. The franchisee is obligated to participate in any such conversion at their own expense, as instructed by Burros Fries. This condition highlights the franchisor's control over brand direction and the franchisee's responsibility to adapt to changes, which may involve additional costs.
For a prospective franchisee, these stipulations mean that converting an existing business to a Burros Fries franchise requires complete cessation of any conflicting business activities within the specified radius. Franchisees must be prepared to invest further in potential brand conversions and ensure full compliance from their staff to avoid legal repercussions.