What happens if a Burros Fries franchisee's required business license is suspended or revoked?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
nchisee agreesto indemnify us under Section 18 of this Agreement which includes any claims arising out of Franchisee's failure to perform its obligations as described above.
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.
Franchisee shall agree to comply and/or assist us in our compliance efforts, as applicable, with any and all laws, regulations, Executive Orders or otherwise relating to antiterrorist activities, including without limitation the U.S. Patriot Act, Executive Order 13224 and related U.S. Treasury and/or other regulations. In connection with such compliance efforts, Franchisee agrees not to enter into any prohibited transactions and to properly perform any currency reporting and other activities relating to the Franchise Business as may be required by law. Franchisee is solely responsible for ascertaining what actions must be taken by Franchisee to comply with all such laws, orders and/or regulations, and specifically acknowledge and agree that Franchisee's indemnification responsibilities as provided in Section 18 pertain to Franchisee's obligations hereunder.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, it is the franchisee's responsibility to secure and maintain all required licenses, permits, and certificates to operate their Burros Fries business. The franchisee must operate in full compliance with all applicable laws, ordinances, and regulations. Burros Fries makes no assurances about what specific inspections, licenses, permits, or authorizations will be required in the franchisee's area. It is solely the franchisee's responsibility to identify and obtain all necessary items for operation. Franchisees also agree to maintain high standards of honesty, integrity, fair dealing, and ethical conduct in all business activities.
If a Burros Fries franchisee fails to meet or maintain governmental standards, or shows less than substantial compliance with any applicable law, rule, or regulation, they must forward copies of any notices, inspection reports, or other communication from any governmental entity to Burros Fries within five days of receipt. The franchisee agrees to indemnify Burros Fries against any claims arising from their failure to perform these obligations.
Failure to maintain the necessary licenses and permits could lead to a breach of the franchise agreement. While the FDD does not explicitly state the consequences of a suspended or revoked license, the franchisor could potentially terminate the agreement if the franchisee is unable to legally operate the business. The franchisee bears the risk of ensuring full compliance and must take proactive steps to maintain good standing with all regulatory bodies.