factual

Does Cilantro Taco Grill have any liability or obligation that continues beyond the expiration or termination of the agreement?

Cilantro_Taco_Grill Franchise · 2024 FDD

Answer from 2024 FDD Document

ection with collection of any amounts owed to Franchisor and/or enforcement of Franchisor's rights under this Agreement.

18. POST-TERMINATION.

  • 18.1 Franchisee's Obligations. Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal, if any, shall:
    • 18.1.1 immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly identify himself, herself or itself as a current Cilantro Taco Grill owner, franchisee or licensee;
    • 18.1.2 immediately and permanently cease to use the Marks, any imitation of any Mark, logos, copyrighted material or other intellectual property, confidential or proprietary material or indicia of a Cilantro Taco Grill restaurant, or use any trade name, trade or service mark or other commercial symbol that suggests an association with Franchisor, Licensor, or the System. In particular, Franchisee shall cease to use, without limitation, all signs, billboards, advertising materials, displays, stationery, forms and any other articles, which display the Marks;
    • 18.1.3 take such action as may be necessary to cancel any assumed name or equivalent registration that contains the Mark or any other service mark or trademark of Franchisor, and Franchisee shall furnish Franchisor with evidence of compliance with this obligation, which is satisfactory to Franchisor, within five (5) days after termination or expiration of this Agreement;

  • 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, fixtures, and inventory owned by Franchisee and located at the Franchised Business location at the time of default;
  • 18.1.5 pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
  • 18.1.6 immediately deliver at Franchisee's sole cost and expense, to Franchisor the Manual and all records, files, instructions, correspondence, invoices, agreements, designs, completed project signs, all confidential, proprietary and copyrighted material and all other materials related to operation of the Franchised Business, including but not limited to customer lists and records, (all of which are acknowledged to be Franchisor's property), delete all electronic copies and retain no copy or record of any of the foregoing, except Franchisee's copy of this Agreement and of any correspondence between the parties and any other documents that Franchisee reasonably needs for compliance with any provision of law;
  • 18.1.7 comply with the non-disclosure and non-competition covenants contained in Article 19; and
  • 18.1.8 in the event this Agreement is terminated due to Franchisee's default, within fifteen (15) days from the effective date of termination, Franchisee shall pay Franchisor a lump sum payment (as liquidated damages and not as a penalty) in an amount equal to: (a) the average monthly Royalty Fee and Worldwide Creative Marketing Fee payable by Franchisee over the twelve (12) month period immediately prior to the date of termination (or such shorter time period if the Franchised Business has been open less than twelve (12) months); (b) multiplied by the lesser of (i) thirty-six (36) months or (ii) the number of months then remaining in the then-current term of this Agreement. Franchisee acknowledges that a precise calculation of the full extent of the damages Franchisor will incur in the event of termination of this Agreement as a result of Franchisee's default is difficult to determine and that this lump sum payment is reasonable in light thereof. The liquidated damages payable by Franchisee pursuant to this Section 18.1.8 shall be in addition to all other amounts payable under this Agreement and shall not affect Franchisor's right to obtain appropriate injunctive relief and remedies pursuant to any other provision of this Agreement.

Source: Item 23 — RECEIPT (FDD pages 52–208)

What This Means (2024 FDD)

According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, several obligations and restrictions extend beyond the termination or expiration of the franchise agreement. Upon termination, the franchisee must immediately cease operating the Franchised Business and cannot identify themselves as a current Cilantro Taco Grill owner or franchisee. They must also stop using Cilantro Taco Grill's trademarks, logos, and other intellectual property. The franchisee is responsible for canceling any assumed name registrations that contain Cilantro Taco Grill's marks and must provide evidence of compliance to the franchisor within five days.

Furthermore, the franchisee must promptly pay all sums owed to Cilantro Taco Grill and its affiliates, including damages, costs, and attorneys' fees resulting from any default by the franchisee. This payment obligation creates a lien in favor of Cilantro Taco Grill against the franchisee's personal property at the franchised location until the debt is paid in full.

For a period of thirty-six months after termination, the franchisee is restricted from engaging in any business that could divert customers from Cilantro Taco Grill or compete with it. Specifically, they cannot participate in any Mexican cuisine restaurant within twenty miles of their former territory or any Cilantro Taco Grill location. These restrictions aim to protect Cilantro Taco Grill's goodwill and business interests even after the franchise agreement ends.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.