How is the territory for a Cilantro Taco Grill franchise defined?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
be arranged and paid for by you.
ITEM 12: TERRITORY
Under the Franchise Agreement, you have the right to establish and operate one Cilantro Taco Grill outlet within a territory that will be defined after the location of your Cilantro Taco Grill outlet is identified and approved by us (the "Territory"). You are required to find and obtain possession of a specific location for your Franchised Business that meets our site selection criteria and our approval. The boundaries of your Territory may be described in terms of zip codes, streets, landmarks (both natural and man-made) or county lines, or otherwise delineated on a map attached to the Data Sheet.
Unit franchisees and multi-unit operators will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
The Territory is determined on an individual basis taking into account geographic area, population density, character of neighborhood, location and number of competing business in the surrounding area, and other factors. There is no minimum territory size for a given Territory, and the exact size of each Territory we award varies based on the factors we have identified; however, a typical Territory might cover a geographical area that consists of: (a) up to a 2-mile radius surrounding your location if your location is in a suburban market area; (b) up to a 1/4-mile radius surrounding your location if your location is in a metropolitan area, downtown area, urban market area, central business district or other area with similar population density; or (c) the Non-Traditional Site. If the Franchised Business is located in a gas station or convenience store; transportation facility, including airport, train station, subway or rail or bus station; military base or government office; sports facility, including stadium or arena; amusement park, zoo or convention center; car or truck rest stop or travel center; educational facility; recreational theme park; hospital; business or industrial foodservice venue; venue in which foodservice is or may be provided by a master concessionaire or contract foodservice provider; Indian reservation; casino; or any similar captive market location ("Non-Traditional Site"), you will not receive a Territory. Furthermore, you understand and acknowledge that if any Non-Traditional Site (as described above) is located within the physical boundaries of your Territory, then the premises of this Non-Traditional Site will not be included in the Territory and you will have no rights to this Non-Traditional Site.
If you are a Multi-Unit Operator, each Franchised Business and its Territory will be located within your Development Area. The designated geographical territory for each Franchised Business will depend on whether your Franchised Business will be located in an urban or a suburban setting. There is no minimum territory size for a given Territory, and the exact size of each Territory we award varies based on the thencurrent terms described above. You must submit each proposed site to be developed under the minimum performance schedule to us for our approval, which approval will be based on our then-current standards.
Your Territory will be identified in your Franchise Agreement.
During the term of your Franchise Agreement, and provided that you are not in default of your Franchise Agreement, we will not open another Cilantro Taco Grill outlet or grant the right to anyone else to open a Cilantro Taco Grill outlet within your Territory. However, we reserve all rights to sell, either directly or through others, our products and services under the Marks in the Territory through alternative distribution channels.
There are no minimum sales volumes, market penetration or any other contingencies that will affect your limited protected right to operate in the Territory during the term of your Franchise Agreement, unless you are in default of your obligations to us.
You may not change the location of your Franchised Business, without our written consent, which we may withhold in our sole discretion. If we give our consent, we will charge you a relocation fee equal to $1,500 in addition to our actual costs and expenses. The conditions under which we may allow you to relocate include the following: loss of your premises not due to your default, demographics of the surrounding area, proximity to other Cilantro Taco Grill outlets, lease requirements, traffic patterns, vehicular and pedestrian access, proximity to major roads, available parking, and overall suitability. If you wish to relocate, you must identify a new location for the Franchised Business that meets our approval, in accordance with our then-current site selection procedures, and build out the approved location within 120 days. If you do not identify a site and complete the build-out within this time period, we may terminate the Franchise Agreement. You must continue to operate at your original premises until construction of the new site is complete.
Unless you have signed our Multi-Unit Operator Agreement, we may, but have no obligation to, consider granting to you the right to establish additional Cilantro Taco Grill outlets under other franchise agreements.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the territory granted to a franchisee is defined after the location of their Cilantro Taco Grill outlet is identified and approved. The boundaries of the territory may be described using zip codes, streets, landmarks, county lines, or delineated on a map attached to the Data Sheet. However, Cilantro Taco Grill unit franchisees and multi-unit operators do not receive an exclusive territory, and they may face competition from other franchisees, outlets owned by Cilantro Taco Grill, or other channels of distribution.
The size of a Cilantro Taco Grill territory is determined on an individual basis, considering factors such as geographic area, population density, the character of the neighborhood, the location and number of competing businesses, and other relevant factors. A typical territory might cover up to a 2-mile radius in a suburban market area or up to a 1/4-mile radius in a metropolitan, downtown, or urban market area. However, if the franchise is located in a Non-Traditional Site such as a gas station, airport, or educational facility, the franchisee will not receive a territory.
Cilantro Taco Grill also reserves certain rights within and outside the territory. They or their affiliates may operate Cilantro Taco Grill outlets outside the franchisee's territory and may operate other kinds of businesses within the territory. Cilantro Taco Grill may sell products and services under the Cilantro Taco Grill marks within or outside the territory through alternative distribution channels such as retail outlets, ghost kitchens, and the internet, without compensating the franchisee. Franchisees are not allowed to solicit or accept orders from customers outside their territory or use alternative distribution channels to make sales inside or outside their territory. Franchisees' local advertising must target customers in their territory, although the reach of the advertising may extend beyond the territory.