Must Azal Coffee approve the Letter of Intent (LOI) for the lease before it is signed?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
If you lease the Franchise Location, you must obtain our prior written approval of the lease and the lease must not be terminated, renewed or in any way altered or amended by you and the landlord without our prior written consent. In order to obtain our approval, you must submit to us a description of the proposed site, evidence confirming your prospects for obtaining the site, economic terms, use clause, and any other materials we specify. You must obtain our approval of the location under Section 6.1. You must submit to us and we must approve under this Section any letter of intent ("LOI") for the lease for the Franchise Location before you sign the LOI. The lease for the Franchise Location must be submitted to us and approved by us under this Section before you sign the lease for the Franchise Location. You must deliver to us a fully signed copy of the lease for the Franchise Location within five (5) days after the lease is fully signed. Although we must approve your lease for the Franchise Location, we will not evaluate or be responsible for the commercial reasonableness or suitability of the lease. You must evaluate and are solely responsible for the commercial reasonableness and suitability of your lease.
Unless we agree otherwise, the term of your lease and options must be equal to or greater than the term of this Agreement. As a condition to our approval of the lease, the lease must contain the provisions included in the form of Addendum to Lease attached to this Agreement as Appendix G (except to the extent we agree to waive any of the provisions) and other provisions that we reasonably specify. In addition, as a condition to approval of the lease, you must execute a Collateral Assignment of Lease in the form attached to this Agreement as Appendix H. Except in accordance with this Agreement, you must not assign your lease or let or sublet the Franchise Location or any portion of the Franchise Location without our prior written consent.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, a prospective franchisee must submit the Letter of Intent (LOI) for the lease of the Franchise Location to Azal Coffee for approval before signing it. Additionally, the actual lease for the Franchise Location must also be submitted to Azal Coffee for approval before the franchisee signs the lease. After the lease is fully signed, a fully signed copy of it must be delivered to Azal Coffee within five days.
This requirement ensures that the lease terms align with Azal Coffee's standards and protects their interests. However, Azal Coffee does not evaluate or take responsibility for the commercial reasonableness or suitability of the lease; the franchisee is solely responsible for assessing these aspects.
Furthermore, the term of the lease and any options to renew must be equal to or greater than the term of the Franchise Agreement, unless Azal Coffee agrees otherwise. The lease must also include provisions outlined in the Addendum to Lease (Appendix G) and a Collateral Assignment of Lease (Appendix H), unless Azal Coffee waives these requirements. The franchisee cannot assign the lease or sublet the Franchise Location without Azal Coffee's prior written consent.
These stipulations are in place to maintain control over the Franchise Location and ensure consistency within the Azal Coffee franchise system. Franchisees should carefully review these requirements and understand their responsibilities regarding lease agreements.