In the context of this agreement, what is the 'Multi-Unit Operator' for Cilantro Taco Grill defined as?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Multi-Unit Operator acknowledges that, pursuant to this Agreement, Multi-Unit Operator will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training and experience of Multi-Unit Operator.
Multi-Unit Operator acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Cilantro Taco Grill outlets, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Multi-Unit Operator is entering into this Agreement.
In consideration for such specialized training, trade secrets, Confidential Information and rights, Multi-Unit Operator covenants that, except as otherwise approved in writing by Franchisor:
- 8.3.1 During the term of this Agreement, Multi-Unit Operator shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Multi-Unit Operator's Cilantro Taco Grill outlets or of other Multi-Unit Operators or franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or food service
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, a 'Multi-Unit Operator' is referenced throughout the agreement, particularly in the context of non-competition covenants, development rights, and general obligations. The document emphasizes that as a Multi-Unit Operator, the franchisee will receive valuable training, trade secrets, and confidential information that provide a competitive advantage in developing and operating Cilantro Taco Grill outlets. This specialized knowledge is considered a primary reason for entering the agreement.
The agreement stipulates that the Multi-Unit Operator must adhere to non-competition covenants, preventing them from diverting business or participating in competing Mexican cuisine restaurants during the term of the agreement and for a specified period afterward. The Multi-Unit Operator is also responsible for exercising development rights by entering into separate Franchise Agreements for each Cilantro Taco Grill outlet and must comply with a Mandatory Development Schedule.
Furthermore, the document clarifies that the Multi-Unit Operator is an independent licensee and not an agent, legal representative, or employee of Cilantro Taco Grill. The Multi-Unit Operator is personally responsible for their actions and agrees to indemnify Cilantro Taco Grill from any liabilities arising from the development and operation of the outlets. The agreement also outlines conditions for exercising development rights, including compliance with financial criteria, demonstration of management skills, and adherence to all agreements with Cilantro Taco Grill.