What is the effect of the addendum on the existing Franchise Agreement for Azal Coffee?
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 sentence of Section 5.8 is deleted. |
| F. Location Approval and Development. Except as provided in Section C of this |
| Addendum, we acknowledge that, for purposes of Sections 6.1 and 6.4 of the Franchise |
Agreement, the Franchise Location is approved by us and is currently developed in accordance with our specifications.
- G. Date of Opening. For purposes of Section 6.8 of the Franchise Agreement, you must begin operation of the Franchise Business on the effective date of the transfer.
- H. Legal Effect. Except as modified by this Addendum, the Franchise Agreement will remain in full force and effect and is incorporated in this Addendum by reference.
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DURAR INVESTMENT LLC
Azal Coffee 2
EXHIBIT D-2
FRANCHISE TERMINATION AND RELEASE AGREEMENT-TRANSFER
FRANCHISE TERMINATION AND RELEASE AGREEMENT - TRANSFER
| THIS | S AGREEMENT I | s effective the | day of | , 20, | and is | made |
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| between Du | ırar Investment, LL | .C, a Michigan limite | ed liability company | y (" Franchisor ") a (" Franchisee "). | nd In | this |
| Agreement, | " we ," " us ," and " o | ur " refers to Franch | isor and " you " and | " your " refers to F | ranchise | e. |
| 1. | We and you a he " Franchise Agr | • | • | |||
| franchise at | ||||||
| ("St | ore"). You entered | d into an agreement | to sell the Store t | o a buyer accept | able to u | ıs (the |
| sale under S we and you agreement | Section 14.3 of the are terminating the with the Buyer. Al | r right of first refus Franchise Agreem ne Franchise Agree I capitalized terms r ranchise Agreemen | ent. In accordance ement so that we not otherwise defir | with the Franchismay enter into a | se Agree new frar | ement, nchise |
- 2. Termination of Franchise Agreement. You and we agree that the Franchise Agreement is terminated as of the effective date of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the addendum modifies the existing Franchise Agreement when a franchisee purchases an existing Azal Coffee store from a previous franchisee. The addendum acknowledges the purchase agreement between the new franchisee and the seller and amends the original agreement to reflect the transfer of ownership.
The addendum outlines specific conditions that must be met for the Franchise Agreement to become effective, including the completion of initial training and the closing of the store purchase. If these conditions aren't met by a specified date, Azal Coffee has the option to terminate the agreement, retaining the transfer fee. However, confidentiality and non-competition provisions remain in effect. If the conditions are met, the Franchise Agreement becomes effective on the date the new franchisee takes possession of the store.
The addendum also addresses the refurbishment requirements for the franchise location, requiring the franchisee to complete necessary updates and improvements within 90 days of the effective date. Furthermore, the addendum modifies the initial franchise fee and services provided. The new franchisee is not required to pay the initial franchise fee but must pay a transfer fee instead. Certain services outlined in the original agreement may also be deleted or amended.
In the event of a transfer of ownership, Azal Coffee requires the previous franchisee to terminate their existing Franchise Agreement. The franchisee must discontinue using Azal Coffee's intellectual property, confidential information, and franchise systems, and cease all advertising. They are also responsible for removing and returning all materials containing Azal Coffee's branding. This ensures a clean break between the previous franchisee and the Azal Coffee brand, maintaining consistency and protecting the brand's integrity.