What must the additional Franchise Agreement contain for the development of a Cilantro Taco Grill outlet?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
f the issued and outstanding stock for each Restaurant to be opened pursuant to said
Franchise Agreement. In no event shall Multi-Unit Operator relinquish control over each entity operating each Restaurant.
- 5.2 Mandatory Development Schedule. Subsequent to Multi-Unit Operator's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, then upon acceptance of each subsequent Cilantro Taco Grill outlet to be developed under the Mandatory Development Schedule, Multi-Unit Operator shall execute an additional Franchise Agreement, containing the accepted street address, for the development of a Cilantro Taco Grill outlet Notwithstanding the foregoing, Multi-Unit Operator shall open the Cilantro Taco Grill outlets in accordance with the Mandatory Development Schedule attached hereto as Attachment 3.
- 5.2.1 Multi-Unit Operator acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Multi-Unit Operator's independent investigation and analysis. Failure by Multi-Unit Operator to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, for a multi-unit operator to develop additional Cilantro Taco Grill outlets, each subsequent Franchise Agreement must include the accepted street address for the location. The multi-unit operator must also adhere to the Mandatory Development Schedule outlined in Attachment 3 of the agreement. The franchisee needs to return the executed Franchise Agreement to Cilantro Taco Grill within fifteen days of receipt. If Cilantro Taco Grill does not receive the agreement within this timeframe, their approval of the multi-unit operator's request becomes void, and the operator loses rights to the site.
Furthermore, the multi-unit operator is required to execute each Franchise Agreement and maintain a minimum of fifty-one percent ownership of the issued and outstanding stock for each restaurant opened under the Franchise Agreement. The multi-unit operator must retain control over each entity operating each Cilantro Taco Grill restaurant.
These stipulations ensure that Cilantro Taco Grill maintains standards and control over its brand, even as it expands through multi-unit operators. The strict timelines and ownership requirements protect Cilantro Taco Grill's interests and ensure the operator is committed to the success of each location. The inclusion of the street address in the Franchise Agreement is a standard practice in franchising, as it clearly defines the territory and location for each franchised business.