Within what radius of a Burros Fries location are franchisees prohibited from operating a similar business?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
b. Employ or seek to employ any person who is at the time employed by us or any franchisee or developer of ours, or otherwise directly or indirectly induce such persons to leave that person's employment.
- c. Directly or indirectly, for yourself or through, on behalf of or in conjunction with any person, partnership or corporation, own, maintain, operate, engage in or have any financial or beneficial interest in (including interest in corporations, limited liability companies, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to, any business which is the same as or similar to the Burros & Fries Business including, but not limited to, the offering of products and services that are similar to the Products and Services which have been offered through the Business or is intended to be, located within a ten (10) mile radius of the Approved Location in the Franchise Agreement or of any Burros & Fries business (which includes companyowned businesses and/or other franchise businesses) in existence or under construction as of the expiration or termination of, or the transfer of all or your interest in, the Franchise Agreement.
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- You undertake to use your best efforts to ensure that your staff acts as required by this Agreement.
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- You agree that in the event of a breach of this Agreement, we would be irreparably injured and be without an adequate remedy at law. Therefore, in the event of such a breach, or threatened or attempted breach of any of the provisions hereof, we shall be entitled to enforce this Agreement and shall be entitled, in addition to any other remedies which are available to it at law or in equity, including the right to terminate the Franchise Agreement, to a temporary and/or permanent injunction and a decree for the specific performance of the terms of this Agreement, without the necessity of showing actual or threatened harm and without being required to furnish a bond or other security.
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- You agree to pay all expenses (including court costs and reasonable legal fees) incurred by us and You in enforcing this Agreement.
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- Any failure by us or You to object or to take action with respect to any breach of this Agreement by You shall not operate or be construed as a waiver of or consent to that breach or any later breach by You.
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- THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF CALIFORNIA.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, franchisees are restricted from engaging in any similar business within a 10-mile radius of their approved location or any existing or planned Burros Fries business. This restriction applies during the term of the franchise agreement and for two years after the agreement's termination, transfer, or a final order from an arbitrator or court. This non-compete clause prevents franchisees from leveraging the training, confidential information, and the Burros Fries system to operate a competing business nearby.
This restriction extends not only to direct operation of a competing business but also to any indirect involvement, such as providing advice, assistance, or loans to a similar business. The definition of a similar business includes those offering products and services similar to those offered by Burros Fries. This broad definition aims to protect Burros Fries' market share and brand integrity by preventing franchisees from diverting customers or replicating the Burros Fries concept in the immediate vicinity.
If any part of this non-compete agreement is deemed unenforceable in a particular jurisdiction, the remainder of the agreement remains in effect in other jurisdictions. Additionally, in such cases, Burros Fries retains the option to purchase the franchisee's business upon the agreement's expiration or termination. This provision ensures that Burros Fries has recourse to maintain its competitive position even if the non-compete clause is partially invalidated.
Prospective franchisees should carefully consider the implications of this non-compete agreement, especially if they have prior experience in the food service industry or plan to operate multiple businesses. Understanding the scope and duration of the restriction is crucial for making an informed decision about investing in a Burros Fries franchise.