Can Azal Coffee designate a substitute purchaser if it exercises its right of first refusal?

Based on the 2024 Azal Coffee Franchise Disclosure Document, when Azal Coffee exercises its option to accept assignment of the lease, it has the right to transfer or assign the lease to another Azal Coffee franchisee without needing consent from the landlord. This transfer to another franchisee relieves Azal Coffee from any further liability under the lease, and the terms of the addendum remain in effect for the new franchisee.

This clause is triggered upon the expiration or termination of the Franchise Agreement, the expiration or termination of the lease, the franchisee's loss of possession of the premises, or the franchisee's abandonment of the premises. Abandonment is presumed if the franchisee fails to operate the business for two consecutive days. Azal Coffee must provide written notice of its intent to exercise the option within 30 days of the triggering event, except in cases of default where the landlord provides notice, and Azal Coffee must exercise its right to accept assignment within the periods specified in those notices.

In practical terms, this means that if an Azal Coffee franchisee decides to sell their franchise or defaults on their lease, Azal Coffee can step in and take over the lease. Instead of directly operating the location itself, Azal Coffee can then assign the lease to another one of its franchisees. This provides Azal Coffee with flexibility in managing its franchise network and ensuring continued operation of the location under the Azal Coffee brand. The new franchisee assumes all rights and obligations under the lease, while Azal Coffee is released from further liability.