Who is responsible for the expenses related to additions, repairs, replacements, improvements, and alterations to a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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, the franchisee bears the risk of damage, loss, theft, or destruction to the business. The franchisee is also responsible for placing the business in good condition and repair if the loss has not materially impaired the business. 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.
This means that if a Burros Fries location suffers damage from any cause, the franchisee is responsible for the costs of repair or replacement. This responsibility extends to any additions, repairs, replacements, improvements, and alterations needed to maintain or restore the business. The franchisee must notify Burros Fries in writing within ten days of any such loss.
Burros Fries has the option to demand that the franchisee restore the business to a satisfactory condition if the damage isn't significant. However, if the damage is substantial, Burros Fries can require the franchisee to either repair the existing location or find a new one within the designated territory. Failure to comply with these requirements could lead to termination of the franchise agreement.
In the event of termination due to loss or damage, the franchisee must return all system materials to Burros Fries. Burros Fries also has the first right of refusal to purchase the franchise's assets, though the purchase price will be reduced to account for the loss incurred by the franchisee. This arrangement places a significant financial burden on the franchisee to maintain and protect the business location.