What is a Cilantro Taco Grill franchisee prohibited from doing with Alternative Distribution Channels?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
ary trademarks during the Term of your Franchise Agreement.
We and our affiliates may sell products and services under the Marks within or outside the Territory through any method of distribution other than a dedicated Cilantro Taco Grill outlet location, such as distribution through retail outlets, including but not limited to, grocery stores; ghost kitchens; co-branding with other food outlets; in captive market locations, such as airports, stadiums, institutional/professional campuses and conferences; and the Internet ("Alternative Distribution Channels"). You will receive no compensation for our sales through Alternative Distribution Channels in the Territory. You may not use Alternative Distribution
Channels to make sales inside or outside your Territory; however, we will include a listing on our website of your Cilantro Taco Grill outlet location and customers may place on-line orders at your location for pick-up or delivery.
You may not solicit or sell or accept orders from customers outside your Territory. You may not use Alternative Distribution Channels to solicit or sell products inside or outside your Territory. You will not receive any compensation or consideration if we solicit or accept sales orders in your Designated Territory. Your local advertising must target customers in your Territory, although the reach of your local advertising may extend beyond your Territory.
ITEM 13: TRADEMARKS
CTG IP LLC is the owner of the Marks and has granted us the exclusive right to use the Marks and license to others the right to use the Marks in the operation of a Cilantro Taco Grill outlet in accordance with the system.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, franchisees are restricted in their use of Alternative Distribution Channels. Cilantro Taco Grill reserves the right to sell products and services through methods other than dedicated Cilantro Taco Grill outlets, such as retail outlets, ghost kitchens, co-branding, captive market locations (airports, stadiums, campuses, conferences), and the Internet.
Specifically, a Cilantro Taco Grill franchisee "may not use Alternative Distribution Channels to make sales inside or outside your Territory". This means franchisees cannot leverage these alternative channels to generate revenue, even within their designated territory. However, Cilantro Taco Grill will include the franchisee's outlet location on its website, allowing customers to place online orders for pick-up or delivery at the franchisee's location.
Furthermore, franchisees "may not solicit or sell or accept orders from customers outside your Territory" and "may not use Alternative Distribution Channels to solicit or sell products inside or outside your Territory." This clarifies that franchisees are restricted from actively seeking customers or processing sales through alternative channels, whether those customers are within or outside their territory. The FDD also states that the franchisee will not receive any compensation if Cilantro Taco Grill solicits or accepts sales orders in the franchisee's Designated Territory. The franchisee's local advertising must target customers in their Territory, although the reach of the advertising may extend beyond the Territory.