Does the lease agreement explicitly define what constitutes 'proximity' regarding other Desi District outlets?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Assignment and Subletting. Notwithstanding any provision of the Lease to the contrary, Tenant shall have the right to assign or sublet the Lease to Franchisor, provided that no such assignment or sublease shall relieve Tenant or any guarantor of liability under the Lease. If Franchisor becomes the lessee of the Leased Premises, then Franchisor shall have the right to assign or sublease its lease to a franchisee of the Desi District brand. Any provision of the Lease which limits Tenant's right to own or operate other Desi District outlets in proximity to the Leased Premises shall not apply to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
The 2024 Franchise Disclosure Document for Desi District does not explicitly define what constitutes 'proximity' in the context of restrictions on franchisees operating other Desi District outlets. However, the lease agreement addresses the scenario where the franchisor, Desi District Franchise Group, becomes the lessee.
According to the FDD, any provision in the lease that limits a tenant's (franchisee's) right to own or operate other Desi District outlets in proximity to the leased premises does not apply to the franchisor if Desi District becomes the lessee. This clause protects Desi District's ability to operate multiple locations without being restricted by proximity clauses that might apply to individual franchisees.
For a prospective franchisee, this means that while their lease might contain restrictions on opening nearby Desi District locations, those restrictions would not apply to Desi District itself. It is important for a potential franchisee to discuss with Desi District what specific criteria are used to determine appropriate distances between franchise locations to fully understand any limitations they might face. Since the FDD does not define 'proximity', it would be prudent to seek clarification from the franchisor regarding this term and its implications during the negotiation process.