What happens if a Cilantro Taco Grill franchisee is in default of their Franchise Agreement?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
d in your Franchise Agreement.
During the term of your Franchise Agreement, and provided that you are not in default of your Franchise Agreement, we will not open another Cilantro Taco Grill outlet or grant the right to anyone else to open a Cilantro Taco Grill outlet within your Territory. However, we reserve all rights to sell, either directly or through others, our products and services under the Marks in the Territory through alternative distribution channels.
There are no minimum sales volumes, market penetration or any other contingencies that will affect your limited protected right to operate in the Territory during the term of your Franchise Agreement, unless you are in default of your obligations to us.
You may not change the location of your Franchised Business, without our written consent, which we may withhold in our sole discretion. If we give our consent, we will charge you a relocation fee equal to $1,500 in addition to our actual costs and expenses. The conditions under which we may allow you to relocate include the following: loss of your premises not due to your default, demographics of the surrounding area, proximity to other Cilantro Taco Grill outlets, lease requirements, traffic patterns, vehicular and pedestrian access, proximity to major roads, available parking, and overall suitability. If you wish to relocate, you must identify a new location for the Franchised Business that meets our approval, in accordance with our then-current site selection procedures, and build out the approved location within 120 days. If you do not identify a site and complete the build-out within this time period, we may terminate the Franchise Agreement. You must continue to operate at your origi
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, if a franchisee is in default of their Franchise Agreement, it can impact their territorial rights. Specifically, provided a franchisee is not in default, Cilantro Taco Grill will not open another outlet or grant the right to anyone else to open an outlet within the franchisee's territory during the term of the Franchise Agreement.
However, this limited protected right to operate in the territory is contingent on the franchisee not being in default of their obligations to Cilantro Taco Grill. This means that if a franchisee fails to meet their obligations under the Franchise Agreement, they could lose the protected status of their territory.
Furthermore, if a franchisee wishes to relocate their Franchised Business and Cilantro Taco Grill gives consent, the franchisee will be charged a relocation fee of $1,500 in addition to actual costs and expenses. However, if the franchisee does not identify a suitable new site and complete the build-out within 120 days, Cilantro Taco Grill may terminate the Franchise Agreement.