What obligations of the Burros Fries franchisee does the transferee assume in the written assumption agreement?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
s, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances;
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- The transferee (and, if the transferee is other than an individual, such principals and/or owners of a beneficial interest in the transferee as we may request)shall enter into a written assumption agreement, in a form satisfactory to us, assuming and agreeing to discharge all of Franchisee's obligations, known by transferee after reasonable inquiry, under this Agreement and/or any new franchise agreement;
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- The transferee must meet our subjective and objective standards, including all quality standards, experience, talent, skills, educational, managerial, business and financial capacity; has the aptitude and ability to operate the Business; and has adequate financial resources and capital to operate the Business;
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- The transferee (and, if an Entity its Owners of a beneficial interest in the transferee as we may request) shall execute and agree to be bound by the then current form of this Agreement, which form may contain provisions that materially alter the rights or obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a transferee—the party to whom the franchise is being transferred—must enter into a written assumption agreement. This agreement, in a form satisfactory to Burros Fries, requires the transferee to assume and agree to fulfill all of the original franchisee's obligations under the existing Franchise Agreement. These obligations are those known by the transferee after reasonable inquiry.
This means that the new franchisee steps into the shoes of the previous franchisee, taking on all responsibilities and duties outlined in the original agreement. This could include, but is not limited to, adhering to operational standards, making required payments, and upholding brand standards. The transferee is expected to conduct due diligence to understand these obligations before signing the assumption agreement.
Additionally, Burros Fries may require the transferee to sign the then-current form of the Franchise Agreement, which could materially alter the rights or obligations outlined in the original agreement. This could include higher royalty fees, advertising contributions, and different renewal rights. The transferee may also be required to sign all other ancillary agreements required for the Franchise Business under the then-current form of the agreement, which would supersede the original agreement in all respects.