Besides the modifications in the addendum, what is the legal effect on the Azal Coffee Franchise Agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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EXHIBIT D-1
ADDENDUM TO FRANCHISE AGREEMENT-TRANSFER
ADDENDUM TO FRANCHISE AGREEMENT-TRANSFER
| THIS ADDENDUM is made the day of, 20, and modifies a |
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| 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. |
| B. Contingency ; Date of Effectiveness of Franchise Agreement . The rights and |
| obligations of the parties under the Franchise Agreement are contingent on: (1) your completion of |
| our initial training program; and (2) the closing of the transaction under the Purchase Agreement and the transfer of possession and ownership of the Store to you. If these contingencies are not |
| met by, 20, we may, at our option, terminate the Franchise Agreement. If |
| we terminate the Franchise Agreement as provided in this Section, we will have the right to retain |
| the transfer fee paid by you (or the Seller) and otherwise the parties will have no further rights or |
| obligations to each other under the Franchise Agreement; provided that, the confidentiality and |
| non-competition provisions of the Franchise Agreement will survive the termination. If these |
| contingencies are met by the date specified above in this Section, then the Franchise Agreement |
| will become effective on the date that you receive possession and ownership of the Store (the "Effective Date"). |
| Ellective Date ). |
| C. Refurbishing of Franchise Location. You must complete the refurbishing, |
| updating, upgrading, construction and/or improvement of the Franchise Location and the |
| equipment, fixtures and signs at the Franchise Location as specified below. These actions must |
| be completed within 90 days of the date of the Effective Date of this Addendum. |
| D. Initial Franchise Fee; Transfer Fee . You are not required to pay the initial |
| D. Initial Franchise Fee; Transfer Fee . You are not required to pay the initial franchise fee specified in Section 4.1 of the Franchise Agreement. In lieu of the initial franchise fee, |
| you (or the Seller) must pay a transfer fee in the amount of $ The transfer fee is |
| payable on or before the signing of this Addendum. |
| E. Services Provided to You . Section 5 of the Franchise Agreement is amended as |
| follows: (1) Section 5.5 is deleted. |
| (1) Section 5.5 is deleted. |
| (2) The first se |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, an addendum modifies the original Franchise Agreement. The addendum is made between Durar Investment, LLC (the Franchisor) and the Franchisee. The purpose of the addendum is to reflect the franchisee's acquisition of an already operating Azal Coffee store from an existing franchisee. Unless otherwise defined in the addendum, all capitalized terms retain the same meaning as in the original Franchise Agreement.
The addendum outlines specific conditions that must be met for the Franchise Agreement to become effective. These conditions include the completion of the initial training program and the closing of the transaction under the Purchase Agreement, which involves the transfer of possession and ownership of the store to the franchisee. If these conditions are not met by a specified date, Azal Coffee has the option to terminate the Franchise Agreement, retaining the transfer fee paid. However, confidentiality and non-competition provisions of the Franchise Agreement will still apply. If the conditions are met, the Franchise Agreement becomes effective on the date the franchisee receives possession and ownership of the store.
The addendum also addresses the refurbishing requirements for the franchise location, stating that the franchisee must complete any necessary refurbishing, updating, upgrading, construction, or improvement of the location, including equipment, fixtures, and signs, within 90 days of the addendum's effective date. Furthermore, the addendum modifies the initial franchise fee and services provided. The franchisee is not required to pay the initial franchise fee specified in the original agreement. Instead, a transfer fee must be paid by the franchisee (or the seller) upon signing the addendum. Additionally, specific sections of the Franchise Agreement related to services provided, such as Sections 5.5 and 5.8, are either deleted or amended.