Does the Azal Coffee Agreement permit class-wide litigation?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
I agree that any litigation will only be conducted on an individual, not a class-wide basis, and that a litigation proceeding between me and the Company or the Franchisor may not be consolidated with any other litigation proceeding between me and the Company or the Franchisor and any other person, corporation, limited liability company, partnership, business,
or other entity. I waive, to the fullest extent allowed by law, any right to pursue or participate as a lead plaintiff or a class representative in any claim on a class or consolidated basis.
- AFTER CONSULTING WITH MY ATTORNEY OR HAVING THE OPPORTUNITY TO DO SO, I KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY (AND WITHOUT DURESS OR COERCION) WAIVE ANY RIGHT I MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR BASED ON ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION RELATING TO THIS AGREEMENT. I WILL NOT SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS WILL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ME OR THE COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ME AND THE COMPANY.
Source: Item 23 — RECEIPTS (FDD pages 51–204)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the agreement explicitly prohibits class-wide litigation. It states that any litigation must be conducted on an individual basis, preventing franchisees from joining together in a class action against Azal Coffee or the company. This also means that a franchisee cannot consolidate their litigation with any other litigation proceeding involving Azal Coffee or the company and any other person or entity.
This clause has significant implications for prospective franchisees. By agreeing to this provision, franchisees waive their right to participate in class action lawsuits against Azal Coffee, which could limit their ability to seek redress for widespread issues affecting multiple franchisees. This waiver extends to the right to act as a lead plaintiff or class representative in any claim pursued on a class or consolidated basis.
Furthermore, the agreement includes a waiver of the right to a jury trial in any litigation arising from the agreement. This waiver is knowing, voluntary, and intentional, requiring the franchisee to acknowledge they have consulted with an attorney or had the opportunity to do so before agreeing to the terms. The franchisee also agrees not to consolidate any action in which a jury trial has been waived with any other action where a jury trial is possible. This is further reinforced by stating that these provisions can only be modified or relinquished through a written instrument executed by both the franchisee and the company.
Such restrictions are relatively common in franchise agreements, as franchisors often seek to manage legal disputes on an individual basis to avoid the potential for large-scale class action liabilities. Prospective Azal Coffee franchisees should carefully consider the implications of these waivers and restrictions, as they may affect their legal options in the event of a dispute with the franchisor.