What is the obligation of a Burros Fries franchisee regarding the Accepted Location?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
We hereby grants to Franchisee, upon the terms and conditions herein contained and subject to this Agreement, the right, license, and privilege, and Franchisee hereby accepts a franchise under the terms and conditions set forth herein, to operate a Burros & Fries Business that has been assigned a protected territory as set forth in Section VI (referred to asthe "Territory"), with the right to use solely in connection therewith our Names and Marks, Products, Services, its advertising and merchandising methods, and our System, as they may be changed, improved and further developed from time to time only at the Accepted Location as set forth in Section VI and provided the Franchisee shall adhere to the terms and conditions hereof.
Franchisee shall not relocate its Business that has been assigned a Territory without our prior written consent (specified in Section 22.A). If Franchisee is provided with a Territory then during the term of this Agreement, we shall not establish, nor license another party or entity to establish, Burros & Fries Business within the Territory outlined above. If Franchisee decides to open additional Businesses and buys the rights to additional Franchises, then those separate franchise agreement(s) will dictate the terms of the applicable territory (a separate Franchise Agreement is required for each additional Business as defined in Section 9.D of this Agreement).
Franchisee must operate its Business within the specific Territory as identified in this Section VI. Franchisee may not open a Business at any other location other than the Accepted Location that has been set forth in this Agreement or made a part hereof by an addendum attached to this Agreement. Franchisee
As between us and the Franchisee, the Franchisee shall bear the entire risk of any damage, loss, theft or destruction to the Business from any cause whatsoever or requisition of the Business by any governmental entity or the taking of title to the Business by eminent domain or otherwise (collectively, "Loss"). The Franchisee shall advise us in writing within ten (10) days of any such Loss. No such Loss shall relieve the Franchisee of the obligation to pay Royalty Fees and all other amounts owed hereunder. In the event of any such Loss, we, at our option, may: (a) if the Loss has not materially impaired the Business (in our reasonable Business Judgment), require that the Franchisee, upon our demand, place the Business in good condition and repair reasonably satisfactory to us as mentioned above; or (b) if the Loss has materially impaired the Business and it is substantially destroyed, (in our sole judgment), we may require the Franchisee to repair the existing Business or find an alternative location within the Territory within ninety (90) days or soonest possible timeframe according to Franchisee's lease. We may extend this period an additional thirty (30) days at our discretion and failure of Franchisee to comply may result in termination of this Agreement. Upon termination, the Franchisee must return to us the System (including
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, a franchisee is granted the right to operate a Burros & Fries business, under the terms of the franchise agreement, only at the Accepted Location as set forth in Section VI of the agreement. This right is contingent upon the franchisee adhering to all terms and conditions outlined in the agreement. The franchisee's territory is protected, meaning Burros Fries will not establish or license another party to establish a Burros & Fries business within the defined territory during the agreement term. The territory is determined by population, demographics, traffic, parking, competition, business potential, site availability, square footage, and rent. The territory is finalized once Burros Fries approves the location and will not change. The franchisee must operate within this specific territory and cannot open a business at any location other than the Accepted Location.
If a Burros & Fries franchisee wants to relocate their business, they must obtain prior written consent from Burros Fries. Should the business suffer damage, loss, theft, or destruction, the franchisee bears the entire risk. The franchisee must inform Burros Fries in writing within ten days of any such event. Such loss does not relieve the franchisee of their obligation to pay royalty fees and other amounts owed under the agreement.
In the event of a loss that has not materially impaired the business, Burros Fries may require the franchisee to restore the business to a satisfactory condition. If the loss has materially impaired the business, Burros Fries may require the franchisee to repair the existing business or find an alternative location within the territory within ninety days, with a possible extension of thirty days at Burros Fries's discretion. Failure to comply may result in termination of the agreement, at which point the franchisee must return all materials, and Burros Fries has the first right of refusal to purchase all assets, with the purchase price reduced to account for the franchisee's loss.