What must a Multi-Unit Operator do before opening a Cilantro Taco Grill Restaurant for business?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
i-Unit Operator receives pursuant to the initial Franchise Agreement executed concurrently with this Agreement is sufficient to allow Multi-Unit Operator to construct, equip, open and operate each of Multi-Unit Operator's Cilantro Taco Grill outlets in the Development Area. Within fifteen (15) days after Multi-Unit Operator's receipt of the Franchise Agreement for each outlet, Multi-Unit Operator shall return the executed Franchise Agreement to Franchisor. In the event Franchisor does not receive the properly executed Franchise Agreement within said fifteen (15) days from delivery thereof to Multi-Unit Operator, Franchisor's approval of Multi-Unit Operator's request shall be void and Multi-Unit Operator shall have no rights with respect to said site. Multi-Unit Operator shall be required to execute each Franchise Agreement and own a minimum of fiftyone percent (51%) of the issued and outstanding stock for each Restaurant to be opened pursuant to said
Franchise Agreement. In no event shall Multi-Unit Operator relinquish control over each entity operating each Restaurant.
- 5.2 Mandatory Development Schedule. Subsequent to Multi-Unit Operator's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, then upon acceptance of each subsequent Cilantro Taco Grill outlet to be developed under the Mandatory Development Schedule, Multi-Unit Operator shall execute an additional Franchise Agreement, containing the accepted street address, for the development of a Cilantro Taco Grill outlet Notwithstanding the foregoing, Multi-Unit Operator shall open the Cilantro Taco Grill outlets in accordance with the Mandatory Development Schedule attached hereto as Attachment 3.
- 5.2.1 Multi-Unit Operator acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Multi-Unit Operator's independent investigation and analysis. Failure by Multi-Unit Operator to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement.
- 5.2.2 Multi-Unit Operator shall assume all responsibility and expense for locating potential sites for Restaurants. Multi-Unit Operator acknowledges that the acceptance of a request for a site for a Restaurant by Franchisor shall not be deemed to be an assurance or guaranty that the Restaurant will operate successfully or at a profit from such site. Multi-Unit Operator understands the costs to purchase, equip and make the site operational as a Restaurant may exceed the estimate provided for in Franchisor's Franchise Disclosure Document. It shall be Multi-Unit Operator's responsibility to work with real estate, general contractors and other professionals to understand these overages and how best to accommodate for them.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, a Multi-Unit Operator must fulfill several conditions before opening a Cilantro Taco Grill restaurant. For each Cilantro Taco Grill outlet, the Multi-Unit Operator must enter into a separate Franchise Agreement with Cilantro Taco Grill. Concurrent with signing the Multi-Unit Operator Agreement, the operator must also execute Cilantro Taco Grill's current Franchise Agreement form for the first outlet under the Mandatory Development Schedule. For each subsequent outlet, the Multi-Unit Operator needs to execute Cilantro Taco Grill's then-current Franchise Agreement form, which will be presented along with the current Franchise Disclosure Document.
Within fifteen days of receiving the Franchise Agreement for each outlet, the Multi-Unit Operator is required to return the executed agreement to Cilantro Taco Grill. Additionally, the Multi-Unit Operator must execute each Franchise Agreement and maintain at least 51% ownership of the issued and outstanding stock for each restaurant. They cannot relinquish control over the entity operating each restaurant.
Before Cilantro Taco Grill grants the right to develop an additional outlet, the Multi-Unit Operator must request and timely acknowledge receipt of the current Franchise Disclosure Document, submit all requested information and documents, provide all reasonably requested financial statements, and meet Cilantro Taco Grill's current financial criteria for multi-unit franchisees. The Multi-Unit Operator must also be in full compliance with the Multi-Unit Operator Agreement, the Mandatory Development Schedule, and all Franchise Agreements with Cilantro Taco Grill, as well as any other agreements with Cilantro Taco Grill or its affiliates. Furthermore, the Multi-Unit Operator needs to demonstrate the necessary management skills for competent operation, organization, customer service, and record keeping for an additional Cilantro Taco Grill outlet, as determined by Cilantro Taco Grill's discretion.