What are the general obligations of a Burros Fries franchisee, as outlined in the FDD?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that a Burros & Fries Business involves hard work and long hours. Franchisee acknowledges that we have not represented that this Business is going to be easy for Franchisee (or any of its Owners) and agrees to participate in the day-to-day operation of the Business. Unless otherwise approved in writing by us, Franchisee (or one of its Owners) is required to participate in the dayto-day operation of the Business for at least the first year of operation. After Franchisee's first year of operation, Franchisee (or one of its Owners) is not required to participate in the day-to-day operation, however Franchisee agrees that the Business must be at all times under the operation of a General Manager approved by us (as described in Section 12.F of this Agreement). Franchisee agrees that the General Manager will oversee the operations and supervise all Employees. The General Manager will also be responsible for providing continuing guidance, oversight, day-to-day management, oversee all food preparation, enforce service standards and properly process all paperwork, reports and complaints.
It is Franchisee's sole responsibility and absolute obligation to research all applicable federal, state and local laws and regulations governing the operation of a Burros & Fries Business. Franchisee must secure and maintain in force all required licenses, permits and certificates relating to the operation of its Business and must at all times operate it in full compliance with all applicable laws, ordinances and regulations (including without limitation, regulations relating to fictitious name registrations, sales tax permits, fire clearances, safety, truth in advertising, occupational hazards, indoor air quality, health, laws relating to non-discrimination in hiring and accessibility, worker's compensation and unemployment insurance). In addition, Franchisee must comply with consumer protection laws and regulations concerning food preparation, handling and storage, "Truth in Menu" concerning menu item names, product content, labeling and nutritional claims. We make no representations or assurances as to what inspections, licenses, permits, authorizations or otherwise will be required for Franchisee in the Franchisee's area in connection with its Business. It is Franchisee's sole responsibility to identify and obtain all licenses,
permits, certifications and authorizations necessary for operation. Franchisee agrees to maintain high standards of honesty, integrity, fair dealing and ethical conduct in all business activities.
Before Franchisee opens a Burros & Fries Franchised Business, Franchisee must purchase insurance coverage from a responsible carrier with a performance rating of A or higher as rated in the most recent edition of Best Insurance Reports (or comparable criteria as we may specify) and Franchisee must maintain such insurance throughout the duration of the initial term of the Franchise Agreement and any renewal terms. Franchisee shall list us as additional insured on all its insurance policies. Franchisee will procure and maintain general liability insurance with a minimum policy limit of $2,000,000 per occurrence and $4,000,000 aggregate (this policy should include general tort, premises damage, personal advertising injury and product liability insurance which covers Franchisee for damages that result in injury from products Franchisee distributes). Plus, property and casualty insurance with a minimum policy limit of $2,000,000 or an amount specified by the us.
Franchisee must also procure and maintain "All Risks" or "Special Form" insurance (coverage for the full cost of replacement of the premises and all other property); employer liability insurance, automobile liability insurance with coverage of owned and hired vehicles with minimum coverage in amounts not less than $100,000 combined single limit for bodily and property damage (or what is in accordance with Franchisee's state guidelines); business interruption insurance to fully insure loss of earnings for a period of one-hundred and eighty (180) days or longer as may specify; and statutory workers' compensation insurance with limits of greater than $100,000 or the minimum limits required by law.
Franchisee has the responsibility for selecting a site for its Business. If Franchisee is leasing a space for the Business, we must review and approve the lease prior to the lease being signed. If the Franchisee is purchasing property, we must review and approve the lease or purchase contract prior to it being signed. We will review and approve or disapprove the location of the Business and will not
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, franchisees have several key obligations related to operating their business. These obligations cover areas such as participation in the business, legal compliance, insurance, and adherence to brand standards. For the first year of operation, the franchisee (or one of the owners) must participate in the day-to-day operations of the business. After the first year, if the franchisee (or one of the owners) does not participate in the day-to-day operations, they must have a General Manager approved by Burros Fries overseeing operations, supervising employees, providing guidance, managing food preparation, enforcing service standards, and handling paperwork. Franchisees must also maintain high standards of honesty, integrity, fair dealing, and ethical conduct in all business activities.
Burros Fries franchisees are responsible for researching and complying with all applicable federal, state, and local laws and regulations. This includes securing and maintaining all required licenses, permits, and certificates. Compliance extends to regulations concerning fictitious name registrations, sales tax permits, fire clearances, safety, advertising, occupational hazards, indoor air quality, health, non-discrimination in hiring, accessibility, worker's compensation, and unemployment insurance. Franchisees must also adhere to consumer protection laws related to food preparation, handling, storage, and accurate menu descriptions. Furthermore, franchisees must comply with Payment Card Industry Data Security Standards (PCI DSS) to protect credit card user data and must forward any governmental notices of non-compliance to Burros Fries within five days of receipt.
Maintaining adequate insurance coverage is another critical obligation for Burros Fries franchisees. Franchisees must purchase and maintain insurance coverage from a reputable carrier with a performance rating of A or higher. Required insurance includes general liability insurance with minimum limits of $2,000,000 per occurrence and $4,000,000 in aggregate, property and casualty insurance with a minimum policy limit of $2,000,000, "All Risks" or "Special Form" insurance, employer liability insurance, automobile liability insurance with minimum coverage of $100,000, business interruption insurance to cover loss of earnings for at least 180 days, and statutory workers' compensation insurance. Franchisees must list Burros Fries as an additional insured on all insurance policies.
Franchisees are also responsible for selecting a site for their business, subject to Burros Fries's approval of the location and lease or purchase agreement. While Burros Fries provides a webpage within its corporate website, franchisees must obtain written approval before establishing their own website or engaging in internet promotions, and they must comply with Burros Fries's requirements for online activities. Additionally, franchisees bear the risk of any damage, loss, theft, or destruction to the business, and such events do not relieve them of their obligation to pay royalty fees and other amounts owed. In the event of significant damage, Burros Fries may require the franchisee to repair the business or find an alternative location within a specified timeframe, with failure to comply potentially leading to termination of the franchise agreement.