In the event of death or incapacity, to whom do the rights under the Azal Coffee Franchise Agreement pass?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
If you or your last surviving Designated Owner (if you are an entity) dies or becomes incapacitated, your or the owner's rights under this Agreement will pass to the estate, heirs, devisees or legal representatives of you or the Designated Owner (collectively referred to in this Agreement as the "estate"). The estate may continue operation of the Franchise Business if: (a) the Franchise Business is not closed for more than seven (7) business days and is operated in accordance with applicable law; (b) the estate provides a qualified individual acceptable to us to act as General Manager for the Franchise Business on a full time basis; (c) the General Manager attends and successfully completes our training program at the estate's expense; and (d) the General Manager assumes full time operation of the Franchise Business within ninety (90) days of the date you or the Designated Owner dies or becomes incapacitated. If the estate fails to designate an acceptable General Manager or the designated General Manager fails to attend and satisfactorily complete the training program and to assume the full-time operation of the Franchise Business within ninety (90) days of the death or incapacity, then the estate must sell the estate's interest in the Franchise Business or in this Agreement within one hundred eighty (180) days of the date of death or incapacity. Any sale is subject to our right of first refusal under Section 14.2 and subject to our consent under Section 14.3
After the date of death or incapacity, until a trained General Manager assumes full time operational control of the Franchise Business or until the estate's interest in the Franchise Business or in this Agreement is sold, we may, at our option, assume control of and operate the Franchise Business. During any period that we operate the Franchise Business, we may deduct our expenses for payroll, travel, lodging, meals, and all other expenses and fees from the Franchise Business's
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, in the event of death or incapacity of the franchisee or the last surviving designated owner, the rights under the Franchise Agreement will pass to the estate, heirs, devisees, or legal representatives of the franchisee or designated owner, collectively referred to as the "estate".
The estate can continue operating the Azal Coffee franchise if certain conditions are met. First, the business cannot be closed for more than seven business days and must be operated in accordance with applicable law. Second, the estate must provide a qualified individual acceptable to Azal Coffee to act as a full-time General Manager for the franchise. Third, the General Manager must attend and successfully complete Azal Coffee's training program at the estate's expense. Finally, the General Manager must assume full-time operation of the franchise within 90 days of the date of death or incapacity.
If the estate fails to designate an acceptable General Manager, or if the designated General Manager fails to complete the training program and assume full-time operation within 90 days, the estate must sell its interest in the franchise within 180 days of the date of death or incapacity. Any sale is subject to Azal Coffee's right of first refusal and consent. After the date of death or incapacity, until a trained General Manager assumes control or the franchise is sold, Azal Coffee has the option to assume control and operate the franchise, deducting expenses from the business's revenues.