Does the Cilantro Taco Grill agreement survive the termination of the Franchise Agreement?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
ection with collection of any amounts owed to Franchisor and/or enforcement of Franchisor's rights under this Agreement.
18. POST-TERMINATION.
- 18.1 Franchisee's Obligations. Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal, if any, shall:
- 18.1.1 immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly identify himself, herself or itself as a current Cilantro Taco Grill owner, franchisee or licensee;
- 18.1.2 immediately and permanently cease to use the Marks, any imitation of any Mark, logos, copyrighted material or other intellectual property, confidential or proprietary material or indicia of a Cilantro Taco Grill restaurant, or use any trade name, trade or service mark or other commercial symbol that suggests an association with Franchisor, Licensor, or the System. In particular, Franchisee shall cease to use, without limitation, all signs, billboards, advertising materials, displays, stationery, forms and any other articles, which display the Marks;
- 18.1.3 take such action as may be necessary to cancel any assumed name or equivalent registration that contains the Mark or any other service mark or trademark of Franchisor, and Franchisee shall furnish Franchisor with evidence of compliance with this obligation, which is satisfactory to Franchisor, within five (5) days after termination or expiration of this Agreement;
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, fixtures, and inventory owned by Franchisee and located at the Franchised Business location at the time of default;
- 18.1.5 pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
- 18.1.6 immediately deliver at Franchisee's sole cost and expense, to Franchisor the Manual and all records, files, instructions, correspondence, invoices, agreements, designs, completed project signs, all confidential, proprietary and copyrighted material and all other materials related to operation of the Franchised Business, including but not limited to customer lists and records, (all of which are acknowledged to be Franchisor's property), delete all electronic copies and retain no copy or record of any of the foregoing, except Franchisee's copy of this Agreement and of any correspondence between the parties and any other documents that Franchisee reasonably needs for compliance with any provision of law;
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, several obligations survive the termination or expiration of the Franchise Agreement. Upon termination or expiration, the franchisee must immediately cease operating the franchised business and cannot identify themselves as a current Cilantro Taco Grill owner or franchisee. They must also immediately stop using the Cilantro Taco Grill trademarks, logos, copyrighted material, or any other intellectual property associated with the brand.
Furthermore, the franchisee is obligated to cancel any assumed name registrations that contain the Cilantro Taco Grill mark and provide evidence of compliance to the franchisor within five days of termination or expiration. All sums owed to Cilantro Taco Grill and its affiliates must be promptly paid, including damages, costs, and expenses, such as reasonable attorney's fees, incurred due to the franchisee's default. This payment obligation creates a lien in favor of Cilantro Taco Grill against the franchisee's personal property, furnishings, equipment, fixtures, and inventory located at the franchised business at the time of default, which remains until the debt is paid in full.
Additionally, for a period of thirty-six months after the termination or expiration of the agreement, the franchisee is restricted from engaging in any business activities that could harm Cilantro Taco Grill. Specifically, the franchisee cannot divert business or customers to a competitor, participate in any Mexican cuisine restaurant or food service business within twenty miles of the Territory or any Cilantro Taco Grill location, or perform any act that is injurious or prejudicial to the goodwill associated with the Cilantro Taco Grill brand and system. These post-termination obligations and restrictions are designed to protect Cilantro Taco Grill's brand, customer base, and overall business interests even after a franchise agreement ends.