Will Burros Fries guarantee a franchisee's lease for a single franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee assumes all costs, liability, expense, and responsibility for locating, obtaining and developing a site for the Franchise Business to be established under the Franchise Agreement and for equipping the Business at such premises. A typical Burros & Fries Business has approximately 2,500- 3,000 square feet of space. The space must be enclosed and separate from other businesses with its own locking door. Franchisee may buy or lease the required real property and improvements from any source and on terms approved by us in writing. Franchisee may not sign a lease (or a contract to purchase the premises, if applicable) for the Business until Franchisee has obtained our written approval. Franchisee must not invest any monies for a site in which Franchisee wishes to open a Business until Franchisee has obtained our written approval for the site which will be made by email or any other form of written communication. On the execution of any lease for the Franchise Business, Franchisee will deliver to us a copy of the executed lease and an option to assume the lease executed by the lessor in favor of us in a form acceptable to us. All improvements to the Business must be approved by us.
FRANCHISEE ACKNOWLEDGES THAT OUR ACCEPTANCE OF A PROSPECTIVE SITE AND THE RENDERING OF ASSISTANCE IN THE SELECTION OF A SITE DOES NOT CONSTITUTE A REPRESENTATION, PROMISE, WARRANTY, OR GUARANTEE BY US THAT A BURROS & FRIES FRANCHISE OPERATED AT THAT SITE WILL BE PROFITABLE OR OTHERWISE SUCCESSFUL.
Franchisee acknowledges that we have spent considerable amount of time choosing and creating the décor and outfitting Burros & Fries Businesses. It is part of our trade dress. Franchisee acknowledges and agrees that the design, layout and other characteristics of the Business constitute and/or contain
Source: Item 10 — FINANCING (FDD page 27)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, Burros Fries does not guarantee a franchisee's lease. The franchisee is responsible for securing a suitable site, either by buying or leasing, subject to Burros Fries's written approval. The document emphasizes that Burros Fries's assistance in site selection does not guarantee the profitability or success of the franchise at that location.
Burros Fries requires that the franchisee provide a copy of the executed lease and an option for Burros Fries to assume the lease. The lease must also include provisions that allow the franchisee to operate a Burros Fries Business, restrict the site's use to only a Burros Fries Business, and prevent the franchisee from assigning or modifying the lease without prior written consent from Burros Fries.
Furthermore, the lease should mandate that the lessor provide Burros Fries with copies of any default notices sent to the franchisee and grant Burros Fries the right to cure any default within fifteen days of the franchisee's cure period. It should also allow Burros Fries to take assignment and possession of the business without the lessor's consent or additional consideration. If Burros Fries exercises this right while the franchisee is in good standing, Burros Fries will sign a sublease with the franchisee at the same rent. However, Burros Fries will not be liable for any obligations incurred before their occupancy. These stipulations ensure Burros Fries has control over the location and can maintain operations even if the franchisee defaults.