If a Desi District franchisee leases the Location, what are their obligations?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
ot a representation or warranty that the Business will be successful, and Desi District Franchise Group has no liability to Franchisee with respect to the location of the Business.**
- 6.2 Lease. In connection with any lease between Franchisee and the landlord of the Location: (i) if requested by Desi District Franchise Group, Franchisee must submit the proposed lease to Desi District Franchise Group for written approval, (ii) the term of the lease (including renewal terms) must be for a period of not less than the term of this Agreement, and (iii) Franchisee shall use commercially reasonable efforts to obtain the landlord's signature to a rider to the lease in the form required by Desi District Franchise Group.
- 6.3 Development. Franchisee shall construct (or remodel) and finish the Location in conformity with Desi District Franchise Group's System Standards. If required by Desi District Franchise Group, Franchisee shall engage the services of an architect licensed in the jurisdiction of the Location. Franchisee shall not begin any construction or remodeling work without first obtaining Desi District Franchise Group's approval of Franchisee's plans. Desi District Franchise Group may, but is not required to, inspect Franchisee's construction or remodeling progress at any reasonable time. Franchisee shall not rely upon any information provided or opinions expressed by Desi District Franchise Group or its representatives regarding any architectural, engineering, or legal matters (including without limitation the Americans With Disabilities Act) in the development and construction of the Business, and Desi District Franchise Group assumes no liability with respect thereto. Desi District Franchise Group's inspection and/or approval to open the Business is not a representation or a warranty that the Business has been constructed in accordance with any architectural, engineering, or legal standards.
- 6.4 New Franchisee Training. Franchisee's Principal Executive and one additional chef or general manager must complete Desi District Franchise Group's training program for new
franchisees to Desi District Franchise Group's satisfaction at least four weeks before opening the Business.
- 6.5 Conditions to Opening. Franchisee shall notify Desi District Franchise Group at least 30 days before Franchisee intends to open the Business to the public. Before opening, Franchisee must satisfy all of the following conditions: (1) Franchisee is in compliance with this Agreement, (2) Franchisee has obtained all applicable governmental permits and authorizations, (3) the Business conforms to all applicable System Standards, (4) Desi District Franchise Group has inspected and approved the Business, (5) Franchisee has hired sufficient employees, (6) Franchisee's officers and employees have completed all of Desi District Franchise Group's required pre-opening training;
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, if a franchisee leases the location for their Desi District business, they have several obligations to both the landlord and Desi District. The franchisee must submit the proposed lease to Desi District for written approval if requested. The lease term, including renewals, must be no less than the term of the Franchise Agreement. Additionally, the franchisee must use commercially reasonable efforts to get the landlord to sign a rider to the lease in the form required by Desi District. These stipulations ensure that Desi District maintains some control over the location and its continued operation under the franchise agreement.
Furthermore, the franchisee is responsible for constructing or remodeling the location to meet Desi District's System Standards. They may be required to engage a licensed architect and must obtain Desi District's approval of their plans before starting any construction or remodeling work. While Desi District may inspect the construction or remodeling progress, the franchisee cannot rely on any information or opinions from Desi District regarding architectural, engineering, or legal matters, including compliance with the Americans With Disabilities Act. Desi District assumes no liability in these areas, placing the onus on the franchisee to ensure compliance and proper execution of the build-out.
In addition to lease-related and construction obligations, the franchisee must also keep the business in good condition, perform maintenance, and keep all physical property in good repair. Desi District may also prescribe specific work on the physical property, such as painting, parking lot resurfacing, roof repairs, and replacement of signage, floor coverings, furnishings, equipment, and décor. Franchisees may also be required to undertake a remodel of the location to Desi District's satisfaction within a specified timeframe, potentially requiring the submission of plans for approval. These requirements ensure that all Desi District locations maintain a consistent brand image and meet the franchisor's standards over time.