What is the obligation of a Burros Fries franchisee regarding the operation of their business within the territory?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
The Territory will be determined by population base, demographics of the surrounding area, traffic patterns, proximity to major roads, available parking, competition, business potential, availability of appropriate sites, adequate square footage, reasonable rent or other conditions important to the successful operation of a Franchised Business as we deem appropriate. The Territory is determined once a location is chosen and approved by us, and will not be altered even if there is a population increase or decrease during the term of this Agreement. The Territory is not dependent upon achievement of certain revenues, market penetration or any other contingency. The boundaries of the Territory described above shall be determined by major topographical features which clearly define contiguous areas such as: Streets, highways,freeways or other roadways, rivers, streams, mountains and underdeveloped land. We determine the size and boundaries of the protected Territory.
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).
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.
If Franchisee is asked to conduct business at an off-site event (such as: community events, consumer shows, festivals, expos, etc.) or perform Services outside its Territory in which there is another franchise or company-owned business, Franchisee must immediately refer that request to the franchisee in that geographical area or directly to us. Franchisee must not conduct business at any off-site event or perform any Services outside its Territory if another franchise or company-owned business is operating in that area. If we (where there is a company-owned business) or the other franchise determines it is in the best interest of the person or business for Franchisee to conduct such off-site event or perform Services, then Franchise can immediately proceed. If there is not a Burros & Fries Business in that other area, then Franchisee can immediately conduct such off-site event and/or perform such Services, however Franchisee must be prepared to refer the off-site event or the person or business receiving Services to another franchisee when the unassigned area is purchased.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a franchisee must operate their Burros Fries business within the specific territory that has been assigned to them. The franchisee cannot operate a business at any location other than the Accepted Location specified in the Franchise Agreement or in an addendum.
The territory itself is determined by Burros Fries based on factors such as population, demographics, traffic patterns, proximity to major roads, parking, competition, business potential, site availability, square footage, and rent. Once a location is approved, the territory boundaries are set and will not change during the agreement, even if the population changes. These boundaries are defined by topographical features like streets, highways, rivers, and mountains.
Burros Fries will not establish or license another party to establish a Burros Fries business within the franchisee's territory during the agreement. However, if the franchisee buys rights to additional franchises, each separate franchise agreement will define the terms for those territories. If a franchisee is asked to conduct business at an off-site event or perform services outside their territory where another franchise or company-owned business exists, the franchisee must refer the request to that franchise or to Burros Fries directly. The franchisee can only proceed if the other franchise or Burros Fries determines it is in the best interest to do so. If there isn't a Burros Fries in that area, the franchisee can proceed but must be prepared to refer the event or services to another franchisee if the area is purchased.
Franchisees are also responsible for researching and complying with all applicable federal, state, and local laws and regulations related to operating a Burros Fries business. This includes securing and maintaining all required licenses, permits, and certificates, and operating in full compliance with all applicable laws and regulations. Franchisees must also maintain high standards of honesty, integrity, fair dealing, and ethical conduct in all business activities.