What rights does Cilantro Taco Grill reserve that are not expressly granted in the Franchise Agreement?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve all rights not expressly granted in the Franchise Agreement. For example, we or our affiliates may own, operate or authorize others to own or operate Cilantro Taco Grill outlets outside of the Territory and may operate other kinds of businesses within the Territory. Although we do not currently do so and have no plans to do so, we and our affiliates may own, acquire, conduct, or authorize others to conduct, any form of business at any location selling any type of product or service not offered under the Marks, including a product or service similar to those you will sell at your Franchised Business. We reserve the right to merge with, acquire, or be acquired by, an existing competitive or non-competitive franchise network, chain, or other business; however, we will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement.
We and our affiliates may sell products and services under the Marks within or outside the Territory through any method of distribution other than a dedicated Cilantro Taco Grill outlet location, such as distribution through retail outlets, including but not limited to, grocery stores; ghost kitchens; co-branding with other food outlets; in captive market locations, such as airports, stadiums, institutional/professional campuses and conferences; and the Internet ("Alternative Distribution Channels"). You will receive no compensation for our sales through Alternative Distribution Channels in the Territory. You may not use Alternative Distribution
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the company retains all rights not explicitly granted to the franchisee in the Franchise Agreement. This means Cilantro Taco Grill has broad latitude to operate and authorize others to operate Cilantro Taco Grill outlets outside of the franchisee's territory. They can also operate other kinds of businesses within the territory, even those that might compete with the franchisee's business.
Specifically, Cilantro Taco Grill or its affiliates can own, acquire, conduct, or authorize any form of business at any location selling any type of product or service not offered under the Cilantro Taco Grill trademarks, including similar products or services. Cilantro Taco Grill also reserves the right to merge with, acquire, or be acquired by, an existing competitive or non-competitive franchise network, chain, or other business. However, they will not convert any acquired business in the franchisee's territory to a Cilantro Taco Grill franchise using their primary trademarks during the term of the Franchise Agreement.
Furthermore, Cilantro Taco Grill and its affiliates can sell products and services under the Cilantro Taco Grill trademarks within or outside the territory through alternative distribution channels. These channels include retail outlets like grocery stores, ghost kitchens, co-branding with other food outlets, captive market locations (airports, stadiums, campuses, conferences), and the Internet. The franchisee will not receive any compensation for sales made through these alternative distribution channels in their territory. While franchisees cannot use these alternative distribution channels to make sales inside or outside their territory, Cilantro Taco Grill will list the franchisee's outlet location on their website, allowing customers to place online orders for pick-up or delivery.
Prospective franchisees should be aware that these reserved rights allow Cilantro Taco Grill significant flexibility in how it operates and expands its brand, potentially creating competition for franchisees. It is important to understand the implications of these rights and how they might affect the franchisee's business before investing in a Cilantro Taco Grill franchise.