What is the Burros Fries franchisee's obligation regarding the repair of kitchen equipment?
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)
According to the 2024 Burros Fries Franchise Disclosure Document, the franchisee is generally responsible for maintaining and repairing kitchen equipment. Specifically, the franchisee bears the entire risk of any damage, loss, theft, or destruction to the business, regardless of the cause. This includes the obligation to place the business in good condition and repair, reasonably satisfactory to Burros Fries, if the loss has not materially impaired the business.
If the loss has materially impaired the Burros Fries business and it is substantially destroyed, Burros Fries may require the franchisee to repair the existing business or find an alternative location within the territory within ninety (90) days, or the soonest possible timeframe according to the franchisee's lease. Burros Fries may extend this period by an additional thirty (30) days at their discretion. Failure to comply with these requirements may result in the termination of the Franchise Agreement.
In the event of termination due to such a loss, the Burros Fries franchisee must return all materials related to the Burros Fries system, and Burros Fries has the first right of refusal to purchase all assets. However, any purchase price will be reduced to account for the loss the franchisee incurred. This indicates that franchisees should maintain adequate insurance coverage and be prepared to handle the financial burden of repairs or replacement of kitchen equipment to avoid potential business disruption and termination of the franchise agreement.