What documents related to the lease must an Azal Coffee franchisee and their landlord sign?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Your lease must be approved by us. However, we will not evaluate or be responsible for the commercial reasonableness or suitability of your lease. That is your sole responsibility and we recommend that you engage independent counsel to assist you in the evaluation and negotiation of your lease. Also, unless we otherwise agree, you and your landlord must sign a Lease Addendum acknowledging certain rights we have under the Franchise Agreement that relate to your lease and you must sign a Collateral Assignment of Lease that assigns the lease to us at our option on the occurrence of certain events. A copy of our standard Lease Addendum is attached to the Franchise Agreement as Appendix G and a copy of our standard Collateral Assignment of Lease is attached to the Franchise Agreement as Appendix H.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–25)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees and their landlords must sign a Lease Addendum and a Collateral Assignment of Lease. Azal Coffee must approve the lease, but the company does not evaluate its commercial reasonableness or suitability. It is the franchisee's sole responsibility to assess the lease's suitability, and Azal Coffee recommends engaging independent counsel for assistance.
The Lease Addendum acknowledges certain rights that Azal Coffee has under the Franchise Agreement related to the lease. The standard Lease Addendum is included in the Franchise Agreement as Appendix G. The Collateral Assignment of Lease assigns the lease to Azal Coffee at their option if certain events occur. The standard Collateral Assignment of Lease is included in the Franchise Agreement as Appendix H.
These requirements are fairly standard in franchising. They allow Azal Coffee to protect its brand and ensure business continuity if a franchisee defaults on the franchise agreement. By having the lease assigned to them, Azal Coffee can take over the location and continue operating the business, or transfer it to another franchisee, thus minimizing disruption and maintaining brand presence.