What does 'Termination' of the Franchise Agreement include for Cilantro Taco Grill?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
All terms used but not otherwise defined in this Agreement shall have the meanings set forth in the Franchise Agreement. "Termination" of the Franchise Agreement shall include, but shall not be limited to, the voluntary termination, involuntary termination, or natural expiration thereof.
- 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;
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the termination of the Franchise Agreement includes voluntary termination, involuntary termination, or natural expiration. Upon termination or expiration, the franchisee must immediately cease operating the franchised business and cannot identify themselves as a current Cilantro Taco Grill owner, franchisee, or licensee.
Furthermore, the franchisee must immediately and permanently stop using the Cilantro Taco Grill marks, logos, copyrighted material, or any intellectual property associated with the brand. This includes refraining from using any trade names, service marks, or commercial symbols that suggest an association with Cilantro Taco Grill. The franchisee is obligated to cancel any assumed name registrations containing the Cilantro Taco Grill mark and provide evidence of compliance to the franchisor within five days of termination or expiration.
Additionally, the franchisee must promptly pay all outstanding sums to Cilantro Taco Grill and its affiliates, including damages, costs, and expenses, such as reasonable attorney's 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, furnishings, equipment, fixtures, and inventory located at the franchised business at the time of default. These post-termination obligations are fairly standard in the franchise industry to protect the brand and ensure a clean break.