For Cilantro Taco Grill, what is the due date for the $17,500 payment for the fourth and fifth restaurants?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
reement authorizes and obligates the Multi-Unit Operator to establish and operate ___________ "Cilantro Taco Grill" Restaurants, pursuant to a Franchise Agreement for each Restaurant, in the Development Area.
B. The following is Multi-Unit Operator's Mandatory Development Schedule:
| Restaurant Number | Restaurant Open and Operating by ("Development Deadline") | $ Development Fee paid, per Section 4.1, on ("Effective Date") | Amount to be paid by the Multi-Unit Operator to the Franchisor | Amount Due Date |
|---|---|---|---|---|
| One (1) | , 20 | $35,000 | ||
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the $17,500 payment for the fourth and fifth restaurants is due on the earlier of two dates. These dates are either ninety (90) days before the scheduled opening of the restaurant or the date the franchisee signs the lease for the restaurant premises.
This means that for each of the fourth and fifth Cilantro Taco Grill locations, the franchisee must track both the projected opening date and the lease signing date. The franchisee must then remit the $17,500 payment by whichever of those two dates comes first. This accelerates the payment date if a franchisee secures a lease well in advance of the planned opening.
This payment schedule is tied to specific milestones in the development process, linking payment obligations to tangible progress. This arrangement is not uncommon in franchising, as it helps to ensure that the franchisee is committed to moving forward with the location development. Franchisees should carefully consider their projected timelines for lease negotiation and restaurant build-out to ensure they can meet these payment obligations.