Does the Cilantro Taco Grill FDD warrant the completeness of the FDD?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges and understands the Federal Trade Commission prohibits franchisors from supplying prospecting franchisees any financial information whatsoever unless that information is already disclosed in the Franchise Disclosure Document ("FDD") and Franchisee acknowledges that no individual, corporate officer or member of the management teams for Fransmart, LLC and/or Franchisor has ever provided any financial information whatsoever prior to Franchisee becoming a franchisee of Franchisor, 2. prior to any such disclosure and Franchisee agrees to a full release and hold harmless of financial information Franchisee receives from Franchisor pursuant to this request.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill FDD, the document includes an acknowledgment form regarding financial information. This form states that the Federal Trade Commission prohibits franchisors from providing prospective franchisees with any financial information unless it is already disclosed in the Franchise Disclosure Document.
The form requires the franchisee to acknowledge that no financial information was received from Fransmart, LLC, or Cilantro Taco Grill before becoming a franchisee, except as included in Item 19 of the FDD. Item 19 typically contains financial performance representations, if any, made by the franchisor. The franchisee also agrees to release and hold harmless Cilantro Taco Grill regarding the financial information received pursuant to their request.
This acknowledgment suggests that Cilantro Taco Grill aims to comply with FTC regulations by ensuring all financial information provided to franchisees is disclosed within the FDD, specifically within Item 19. By having franchisees sign this form, Cilantro Taco Grill seeks to protect itself from potential claims related to financial disclosures made outside of the formal FDD. Prospective franchisees should carefully review Item 19 and understand the implications of signing this acknowledgment, as it confirms they have not relied on any financial information beyond what is included in the FDD.