Is the delayed opening fee for a Cilantro Taco Grill franchise refundable?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
based on our then-current standards.
If your Franchised Business does not open within 12 months after you have signed the Franchise Agreement, except for circumstances outside of your control, you must pay to us a delayed opening fee of $100 per day for each day that the opening of your Franchised Business is delayed, up to a maximum of 90 days. If your Franchised Business is not open after this additional 90-day period, then we may terminate your Franchise Agreement or we may require you to continue paying the delayed opening fee until your Franchised Business has opened. This fee is not refundabl
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–33)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, the delayed opening fee is not refundable. If a franchisee's Cilantro Taco Grill location does not open within 12 months of signing the Franchise Agreement, and the delay is due to circumstances within their control, Cilantro Taco Grill may charge a fee of $100 per day, up to a maximum of 90 days.
After this initial 90-day period, Cilantro Taco Grill has the option to either terminate the Franchise Agreement or continue charging the daily delayed opening fee until the location is opened. This provides Cilantro Taco Grill with recourse if a franchisee unduly delays opening their location.
This policy is not uncommon in franchising, as franchisors want to ensure franchisees open promptly to start generating revenue and building the brand. The non-refundable nature of the fee underscores the importance of franchisees diligently meeting the opening timeline outlined in the Franchise Agreement. Franchisees should carefully consider their ability to meet these deadlines before signing the agreement.