Can Burros Fries retain the right to own the site and lease it back to the franchisee in the future?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Before you open your Business, we will:
(1) Provide you with written guidelines for site selection. You must, on your own initiative and atyour own expense locate, obtain and occupy the site and negotiate the lease for your Business. You must select the site for your Business within the protected territory provided in the Franchise Agreement. We currently do not own the site and lease it back to you; however, we retain the rights in the future to do so. You may not sign a lease for the site (or contract to purchase the premises, if applicable) in which you wish to operate your Business until you have obtained our written approval. Additionally, you must not invest any money for the site in which you have not received our written approval. We must accept the site if we feel in our total discretion that it meets or exceeds our standards, but our acceptance does not ensure that your Business will be profitable at the approved location. If we do not approve the site, you will be given a second opportunity to locate a site. If we do not approve the second site, we may terminate the Franchise. The factors that we consider in acceptance of the site include: population density, demographics, traffic patterns, convenience, adequate parking, safety, zoning ordinances, neighborhood and physical characteristics of the premises such as size and layout.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–38)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are responsible for locating, obtaining, and occupying a site for their business, as well as negotiating the lease. However, Burros Fries retains the right to own the site and lease it back to the franchisee in the future.
Before a franchisee can sign a lease or purchase agreement, Burros Fries must provide written approval of the site. If Burros Fries does not approve the initial site, the franchisee will have a second opportunity to find a suitable location. If the second site is also not approved, Burros Fries has the right to terminate the franchise agreement.
Burros Fries considers several factors when evaluating a potential site, including population density, demographics, traffic patterns, convenience, parking, safety, zoning ordinances, and the physical characteristics of the premises. The approval of a site does not guarantee the profitability of the Burros Fries business at that location.