What does the Multi-Unit Operator acknowledge regarding the standards of Cilantro Taco Grill?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Multi-Unit Operator acknowledges that, pursuant to this Agreement, Multi-Unit Operator will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training and experience of Multi-Unit Operator.
Multi-Unit Operator acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Cilantro Taco Grill outlets, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Multi-Unit Operator is entering into this Agreement.
In consideration for such specialized training, trade secrets, Confidential Information and rights, Multi-Unit Operator covenants that, except as otherwise approved in writing by Franchisor:
- 8.3.1 During the term of this Agreement, Multi-Unit Operator shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Multi-Unit Operator's Cilantro Taco Grill outlets or of other Multi-Unit Operators or franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or food service
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill FDD, the Multi-Unit Operator acknowledges several key aspects related to the brand's standards and system. Specifically, the Multi-Unit Operator recognizes that they will receive valuable training, trade secrets, and confidential information that go beyond their current knowledge and experience. This specialized knowledge is considered a competitive advantage that will be valuable in developing and operating Cilantro Taco Grill outlets. The Multi-Unit Operator understands that gaining access to this specialized training, trade secrets, and confidential information is a primary reason for entering into the agreement.
In return for receiving this specialized training, trade secrets, confidential information, and rights, the Multi-Unit Operator agrees to certain non-competition covenants. During the term of the agreement, the Multi-Unit Operator cannot divert business or customers to competitors, participate in any Mexican cuisine restaurant or food service business, or take any action that could harm the goodwill associated with the Cilantro Taco Grill brand and system. They also cannot interfere with the business of the franchisor or other Cilantro Taco Grill franchisees.
These acknowledgements and agreements are designed to protect Cilantro Taco Grill's brand, system, and competitive advantage. By agreeing to these terms, the Multi-Unit Operator demonstrates their understanding of the importance of maintaining the brand's standards and protecting its interests. These restrictions are common in franchising to ensure consistency and prevent franchisees from using the franchisor's knowledge to benefit competing businesses, both during and after the franchise agreement.