Can Burros Fries operate a Burros & Fries Business outside of the franchisee's territory?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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. We and other franchisees and company-owned businesses must refer off-site events, people and businesses that are within Franchisee's Territory to Franchisee and also reserve the same right to conduct off-site events and/or perform Services within Franchisee's Territory if it is determined, to be in the person's or businesses' best interest, by the franchisee of that territory.
If during the term of this Agreement, Franchisee is unable to promptly and properly provide Products or Services to any person or business due to excessive work or other cause; then Franchisee must immediately refer that person or business to another franchise, company-owned business or to us. Failure of Franchisee to: (i) refrain from Target Marketing and/or (ii) refer off-site events and/or person or businesses seeking Services as described herein, will result in us having the right to terminate this Agreement as specified in Section 23.C. For any default of this Agreement which triggers our ability to terminate, then as an alternative to termination, we will have the right, in our sole discretion, to modify or completely eliminate any rights Franchisee may have with respect to the protected area status of the Territory, effective ten (10) days after delivery of written notice to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, franchisees are generally restricted from conducting business outside of their designated territory, with some exceptions. The FDD specifies that 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 the franchisee in that area or directly to Burros Fries. The franchisee can only proceed if the other franchise or Burros Fries determines it's in the best interest of the person or business to do so. If there is no Burros Fries business in that area, the franchisee can proceed with the off-site event or services but must be prepared to refer the event or customer to another franchisee if the area is later assigned.
Burros Fries and other franchisees or company-owned businesses must refer off-site events, people, and businesses within a franchisee's territory to that franchisee. However, they also reserve the right to conduct off-site events or perform services within the franchisee's territory if it's deemed in the best interest of the person or business by the franchisee of that territory. This creates a system where franchisees primarily operate within their territory but can extend their services under specific conditions and with the consent of other involved parties or Burros Fries itself.
Failure to comply with these rules regarding target marketing or referring off-site events and services can result in Burros Fries having the right to terminate the agreement. As an alternative to termination, Burros Fries may modify or completely eliminate any rights the franchisee has regarding the protected area status of their territory, effective ten days after written notice. This highlights the importance of adhering to the outlined procedures for operating outside the designated territory and the potential consequences of non-compliance.