Is Burros Fries obligated to cure a franchisee's default under the lease?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
ns or liability under the lease).
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- The lessor must provide written notice to us (at the same time it gives such notice to you) of any default by you under the lease and we must have, after the expiration of the period during which you may cure such default, an additional 15 days to cure, at our sole option, any such default and, upon the curing of such default, the right to enter upon the leased premises and assume your rights under the lease as if the lease had been assigned by you to us.
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- You are required to furnish copies of all insurance policies required by the Franchise Agreement and by the lease, to us, or such other evidence of insurance coverage and payment of premiums as we request or permit or under the lease.
Before you open your Business for operation, you must obtain the insurance coverage for the Business as specified below. The insurance coverage must be maintained during the term of the Franchise Agreement and provide evidence of insurance to us that insurance has been obtained from a responsible carrier or carriers acceptable to us.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, Burros Fries is not obligated to cure a franchisee's default under the lease; however, they do maintain the option to do so. The lessor must provide written notice to Burros Fries at the same time they notify the franchisee of any default under the lease. After the period during which the franchisee may cure the default expires, Burros Fries has an additional 15 days to cure the default at their sole option.
If Burros Fries elects to cure the default, they have the right to enter the leased premises and assume the franchisee's rights under the lease as if it had been assigned to them. This clause protects Burros Fries's interest in maintaining the location and brand presence, but it does not mandate that they take on the franchisee's lease obligations.
Before a Burros Fries franchisee opens for business, they must submit the proposed lease to Burros Fries for approval. Burros Fries has the option to require that the lease be collaterally assigned to them or contain specific terms and conditions, including the aforementioned notice and cure provisions. This allows Burros Fries to monitor and potentially control the lease agreement to protect their interests, but it does not create an obligation for them to cover a franchisee's default.