What is the purpose of Exhibit A in the Cilantro Taco Grill FDD?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
CTG Franchise LLC Ву: Ву: Name: Cuahutémoc Morfin Title: Owner PRINCIPAL:
EXHIBIT H FRANCHISEE ACKNOWLEDGEMENT STATEMENT
As you know, CTG Franchise LLC (the "Franchisor") and you are preparing to enter into a franchise agreement (the "Franchise Agreement") for the establishment and operation of a Cilantro Taco Grill franchised business (the "Franchised Business"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of Fransmart, LLC ("Fransmart") that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, Exhibit H, titled "Franchisee Acknowledgement Statement," serves to confirm that the prospective franchisee understands they are making a business decision with inherent risks. It aims to verify that the franchisee isn't relying on any unauthorized oral statements, representations, promises, or assurances made during franchise negotiations that haven't been authorized by Cilantro Taco Grill.
This acknowledgement is a way for Cilantro Taco Grill to protect itself from potential future claims by franchisees who might argue they were misled during the franchise sales process. By having franchisees sign this statement, Cilantro Taco Grill seeks to ensure that franchisees understand the risks involved and that they are only relying on information provided in the FDD or authorized by the franchisor.
For a prospective Cilantro Taco Grill franchisee, this means they should carefully review all information provided in the FDD and any other authorized materials. They should also be wary of any promises or representations made by the franchisor's representatives that are not documented in writing or included in the FDD. If there are any discrepancies or concerns, the franchisee should address them with Cilantro Taco Grill before signing the Franchise Agreement and the Franchisee Acknowledgement Statement.
It is a common practice in franchising to include such acknowledgement statements to mitigate legal risks and ensure transparency in the franchise sales process. Franchisees should take this document seriously and use it as an opportunity to clarify any remaining questions or concerns before committing to the franchise.