According to Azal Coffee, where must the Franchise Business always be operated?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2. Use. The Premises must not be used for any purpose other than the operation of an Azal Coffee during the term of the Lease, including renewals.
- 3. Franchisor's Options. Landlord and Franchisee grant to Franchisor the exclusive right, exercisable at the option of Franchisor, to be assigned all right, title and interest of Franchisee in and to the Lease and the Premises:
- a. on the expiration or termination of the Franchise Agreement. Franchisor must give written notice of its intent to exercise this option within thirty (30) days of the event triggering the option;
- b. on the expiration or termination of the Lease or on Franchisee's loss of its rights of possession to the Premises, whether by Franchisee's default under the Lease or otherwise. Landlord shall provide Franchisor notice of default as provided under Section 9 and Section 10. Franchisor shall exercise its right to accept assignment of the Lease within such periods; and
- c. on Franchisees abandonment of the Premises. For this purpose, abandonment will be conclusively presumed if Franchisee fails to have the business open and fully operational for two (2) consecutive days.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the Franchise Business must be operated at a specific location, referred to as the Premises, as outlined in the lease agreement. The lease agreement between the franchisee and the landlord includes an addendum that specifies the premises must not be used for any purpose other than the operation of an Azal Coffee during the term of the lease, including renewals. This ensures that the location is exclusively dedicated to the Azal Coffee franchise.
Azal Coffee maintains options regarding the lease, including the right to be assigned the lease upon the expiration or termination of the Franchise Agreement, the expiration or termination of the lease, or the franchisee's abandonment of the premises. Abandonment is conclusively presumed if the franchisee fails to keep the business open and fully operational for two consecutive days. This provision protects Azal Coffee's interest in maintaining the location for continued operation of an Azal Coffee franchise.
These stipulations in the lease agreement and the franchisor's options provide Azal Coffee with control over the location of the franchise, ensuring it remains an Azal Coffee business. This is a common practice in franchising, as the location is often a critical factor in the success and brand consistency of the franchise system.