Who is considered the 'Seller' in the context of transferring an Azal Coffee franchise?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
On our request, the transferee may be required to sign an acknowledgement of compliance with this prohibition.
- (k) If the transfer involves installment payments by the transferee to the Seller, the Seller must sign a subordination agreement under which the Seller subordinates its right to receive any installment from the transferee to our right to receive all amounts due to us through the due date of the installment. The subordination agreement must be in a format and contain terms and conditions specified by us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, the 'Seller' in the context of transferring an Azal Coffee franchise refers to the current franchisee who is transferring their franchise to a new owner.
Specifically, if the transfer involves the new franchisee making installment payments to the previous franchisee, the previous franchisee, as the Seller, is required to sign a subordination agreement. This agreement ensures that Azal Coffee's rights to receive any amounts owed to them take precedence over the seller's right to receive installment payments from the new franchisee. The subordination agreement must adhere to the format and terms specified by Azal Coffee.
Furthermore, the FDD states that the current franchisee, as the Seller, along with the potential new franchisee, must adhere to any standard procedures that Azal Coffee specifies for the transfer. The Azal Coffee FDD emphasizes that these conditions are essential for protecting the franchise's trademarks and overall system, and they are not intended to create unreasonable restrictions on the transfer process.