Does a Cilantro Taco Grill franchisee receive an exclusive territory?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Unit franchisees and multi-unit operators will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
The Territory is determined on an individual basis taking into account geographic area, population density, character of neighborhood, location and number of competing business in the surrounding area, and other factors. There is no minimum territory size for a given Territory, and the exact size of each Territory we award varies based on the factors we have identified; however, a typical Territory might cover a geographical area that consists of: (a) up to a 2-mile radius surrounding your location if your location is in a suburban market area; (b) up to a 1/4-mile radius surrounding your location if your location is in a metropolitan area, downtown area, urban market area, central business district or other area with similar population density; or (c) the Non-Traditional Site. If the Franchised Business is located in a gas station or convenience store; transportation facility, including airport, train station, subway or rail or bus station; military base or government office; sports facility, including stadium or arena; amusement park, zoo or convention center; car or truck rest stop or travel center; educational facility; recreational theme park; hospital; business or industrial foodservice venue; venue in which foodservice is or may be provided by a master concessionaire or contract foodservice provider; Indian reservation; casino; or any similar captive market location ("Non-Traditional Site"), you will not receive a Territory. Furthermore, you understand and acknowledge that if any Non-Traditional Site (as described above) is located within the physical boundaries of your Territory, then the premises of this Non-Traditional Site will not be included in the Territory and you will have no rights to this Non-Traditional Site.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, unit franchisees and multi-unit operators do not receive an exclusive territory. While a franchisee is granted a territory, the document specifies that they may face competition from other franchisees, outlets owned by Cilantro Taco Grill, other distribution channels, or competitive brands controlled by Cilantro Taco Grill. This means that while a territory is defined, it does not guarantee exclusive rights to operate without competition within that area. The territory's boundaries are determined after the location is approved and can be defined using zip codes, streets, landmarks, or county lines.
Cilantro Taco Grill retains the right to sell products and services under its trademarks within or outside the franchisee's territory through alternative distribution channels, such as retail outlets, ghost kitchens, co-branding, captive market locations (airports, stadiums), and the Internet. Franchisees will not receive compensation for sales made through these alternative channels within their territory. However, Cilantro Taco Grill will list the franchisee's location on its website, allowing customers to place online orders for pick-up or delivery.
During the Franchise Agreement term, Cilantro Taco Grill will not open another outlet or grant the right to open one to someone else within the franchisee's territory, provided the franchisee is not in default. However, this protection is limited, as Cilantro Taco Grill reserves the right to sell its products and services through alternative distribution channels within the territory. The size of a territory varies based on factors like geographic area, population density, and competition. A typical territory might cover up to a 2-mile radius in a suburban area or up to a 1/4-mile radius in a metropolitan area. If the franchise is located in a non-traditional site like a gas station or airport, the franchisee will not receive a territory.