Does the addendum modify the original Azal Coffee Franchise Agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| THIS ADDENDUM is made the day of, 20, and modifies a |
|---|
| Franchise Agreement of the same date (the "Franchise Agreement") entered into by Durar Investment, LLC, a Michigan limited liability company, ("Franchisor") and |
| , a(" Franchisee "). In this |
| , a |
| A. Introduction . You entered into an agreement ("Purchase Agreement") for the |
| purchase of the Azal Coffee located at ("Store") from the current owner of the Store (the "Seller"). We and you |
| desire to amend the Franchise Agreement to reflect the fact that you are acquiring an open and |
| operating Store by transfer from one of our existing franchisees. All capitalized terms not otherwise |
| defined in this Addendum will have the same meaning as in the Franchise Agreement. |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the addendum is designed to modify the existing Franchise Agreement. The document explicitly states that the addendum modifies the Franchise Agreement, particularly when a franchisee is acquiring an already operational Azal Coffee store from a current owner. This modification is intended to reflect the specific circumstances of acquiring an existing store through a transfer.
The addendum outlines several key adjustments to the standard Franchise Agreement. For instance, it addresses the contingency of the agreement, specifying conditions such as completing the initial training program and finalizing the store's purchase. It also details the effective date of the Franchise Agreement, which is tied to the franchisee receiving possession and ownership of the store. Furthermore, the addendum discusses the franchisee's obligation to refurbish the franchise location within 90 days of the addendum's effective date.
Additionally, the addendum modifies the standard fee structure, stating that the franchisee is not required to pay the initial franchise fee typically outlined in the Franchise Agreement. Instead, a transfer fee is required, payable upon signing the addendum. The addendum also amends the services provided, specifically deleting Section 5.5 and the first sentence of Section 5.8 of the original Franchise Agreement. These changes ensure that the Franchise Agreement is appropriately tailored to the context of a store transfer, rather than a new franchise setup.