What agreements must the seller and you sign at the time of transfer of an Azal Coffee franchise?
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- 2. Termination of Franchise Agreement. You and we agree that the Franchise Agreement is terminated as of the effective date of this Agreement.
- Release. As a condition to our consent to your transfer to the Buyer, you release and forever discharge us and our representatives, owners, employees, officers, agents and assigns from all liability, right, claim, debt and cause of action whatsoever, known or unknown, suspected or unsuspected, which you ever had, now have or may have at any time based on any agreement entered into between the parties on or before the date of this Agreement or based on any act or omission occurring on or before the date of this Agreement; provided, that nothing contained in this Section will affect your rights and obligations under this Agreement.
- 4. Your Duties.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, several agreements and actions are required when transferring a franchise. First, the seller and Azal Coffee must agree to terminate the existing Franchise Agreement as of the transfer's effective date. As the seller, you must release Azal Coffee from any liabilities or claims, known or unknown, that occurred on or before the date of the transfer agreement. You must also cease using Azal Coffee's intellectual property, confidential information, and franchise systems, and discontinue all advertising, removing and delivering related materials to Azal Coffee, unless these are specifically transferred to the buyer.
Additionally, if the transfer involves installment payments from the buyer to you (the seller), you must sign a subordination agreement. This agreement ensures that Azal Coffee's right to receive any amounts due from you takes precedence over your right to receive installment payments from the buyer until all your dues are cleared. The subordination agreement must adhere to Azal Coffee's specified format and terms. Your landlord must also allow the lease for the franchise location to be transferred to the buyer.
Finally, you, as the seller, along with the proposed buyer, must comply with any other standard procedures that Azal Coffee specifies. These conditions are deemed necessary to protect Azal Coffee's franchise marks and systems and are not considered unreasonable restrictions on the transfer. These stipulations ensure a smooth transition and protect the integrity of the Azal Coffee brand and franchise system.