What is the deadline for meeting the contingencies related to training and store transfer for Azal Coffee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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").
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the rights and obligations under the Franchise Agreement are contingent upon completing the initial training program and the closing of the transaction under the Purchase Agreement, including the transfer of possession and ownership of the store. If these contingencies are not met by a specified date, the franchisor has the option to terminate the Franchise Agreement. The specific date is left blank in the provided excerpt.
If Azal Coffee terminates the Franchise Agreement due to unmet contingencies, they retain the transfer fee paid by the franchisee or seller. However, both parties are released from further obligations, except for the confidentiality and non-competition provisions, which remain in effect. If the contingencies are met by the specified date, the Franchise Agreement becomes effective on the date the franchisee receives possession and ownership of the store.
Prospective Azal Coffee franchisees should note the importance of understanding the deadline for meeting these contingencies, as failure to meet them could result in termination of the agreement and loss of the transfer fee. Franchisees should clarify this date with Azal Coffee during the due diligence process to ensure they can meet all requirements within the given timeframe. Additionally, franchisees should be aware of the confidentiality and non-competition clauses that survive termination, which could restrict their activities even if the agreement is terminated.