Is the effectiveness of the Azal Coffee Franchise Agreement dependent on completing the initial training program?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| THIS ADDENDUM is made the day of, 20, and modifies a |
|---|
| 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. |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the effectiveness of the Franchise Agreement is contingent upon completing the initial training program under specific circumstances. This condition applies when a franchisee is acquiring an already open and operating Azal Coffee store from a previous owner.
The document specifies that the rights and obligations outlined in the Franchise Agreement are dependent on two key factors: the franchisee's completion of the initial training program and the successful closing of the transaction under the Purchase Agreement, which includes the transfer of possession and ownership of the store. If these conditions are not met by a specified date, Azal Coffee reserves the right to terminate the Franchise Agreement.
If Azal Coffee terminates the agreement due to the non-fulfillment of these contingencies, they have the right to retain the transfer fee paid by the franchisee (or the seller). However, both parties will then have no further obligations to each other under the Franchise Agreement, except that the confidentiality and non-competition provisions will 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.
This contingency is particularly important for prospective franchisees looking to acquire an existing Azal Coffee location, as it makes the initial training program a mandatory step for the agreement to take effect. Franchisees should ensure they allocate sufficient time and resources to complete the training program to avoid potential termination of the agreement and loss of the transfer fee.