What happens to the Burros Fries Royalty Fee payments if the Franchise Agreement is terminated?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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Except as otherwise provided in this Agreement, Franchisee shall retain whatever interest it may have in the Assets of the Franchised Business.
H. Franchisee Must Pay Monies Owed to Franchisor
Franchisee shall pay to us or our affiliates, within thirty (30) days after the effective date of termination or expiration of this Agreement, such Royalty Fees, System Advertising Fund Fees, other advertising fees, payments or any other sums owed to us or our affiliates by Franchisee, which are then unpaid. Franchisee shall pay to us or our affiliates all damages, costs, and expenses, including reasonable attorney's fees, incurred by us in obtaining injunctive or other relief for the enforcement of any provisions of Sections 19 and 24.
25. PROVISIONS RELATING TO ENFORCEMENT
A. Franchisee May Not Withhold Payments Due Franchisor
Franchisee agrees that he or she will not withhold payments of any Royalty Fees, System Advertising Fees or any other amounts of money owed to us for any reason, on grounds of alleged nonperformance by us of any obligation.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, if the Franchise Agreement is terminated, the franchisee is still responsible for paying any outstanding Royalty Fees and other sums owed to Burros Fries or its affiliates. These payments must be made within thirty (30) days of the termination date.
In addition to unpaid fees, the franchisee is also liable for any damages, costs, and expenses, including reasonable attorney's fees, that Burros Fries incurs while enforcing Sections 19 and 24 of the Franchise Agreement. This means that if Burros Fries has to take legal action to recover unpaid fees or enforce other provisions, the franchisee will be responsible for covering those legal costs.
Furthermore, the Franchise Agreement states that a Burros Fries franchisee cannot withhold payments of Royalty Fees, System Advertising Fees, or any other amounts owed to Burros Fries, even if the franchisee alleges nonperformance by Burros Fries. Any claims of nonperformance must be submitted to mediation or arbitration, and the franchisee does not have the right to offset or deduct any amounts owed to Burros Fries.