What evidence is considered as valid and binding as the original assignment document for Azal Coffee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
-
- Introduction. Franchisee has entered into a Franchise Agreement with Durar Investment, LLC ("Franchisor"). The Franchise Agreement requires Franchisee's lease for the Premises to contain certain provisions. In consideration of the agreement of Franchisor to enter into a Franchise Agreement with Franchisee for an Azal Coffee franchise to be located at the Premises, Landlord and Franchisee agree that the provisions contained in this Addendum will be applicable to the Lease notwithstanding anything to the contrary contained in the Lease.
- 2. Use. The Premises must not be used for any purpose other than the operation of an Azal Coffee during the term of the Lease, including renewals.
- 3. Franchisor's Options. Landlord and Franchisee grant to Franchisor the exclusive right, exercisable at the option of Franchisor, to be assigned all right, title and interest of Franchisee in and to the Lease and the Premises:
- a. on the expiration or termination of the Franchise Agreement. Franchisor must give written notice of its intent to exercise this option within thirty (30) days of the event triggering the option;
- b. on the expiration or termination of the Lease or on Franchisee's loss of its rights of possession to the Premises, whether by Franchisee's default under the Lease or otherwise. Landlord shall provide Franchisor notice of default as provided under Section 9 and Section 10. Franchisor shall exercise its right to accept assignment of the Lease within such periods; and
- c. on Franchisees abandonment of the Premises. For this purpose, abandonment will be conclusively presumed if Franchisee fails to have the business open and fully operational for two (2) consecutive days.
On the giving of notice of exercise by Franchisor under this Section, the Lease, and all right, title and interest of Franchisee under the lease and to the Premises will be automatically, and without need of further instrument, assigned to Franchisor. If Franchisor does not give notice of exercise within the applicable time period, Franchisor will be deemed to have forfeited all its rights under this Section. Landlord and Franchisee agree to execute documents confirming this assignment in the form presented by Franchisor, including a short form of Lease suitable for recording.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, there are a few scenarios where documents hold the same weight as the original assignment document.
First, if a franchisee's lease for the premises contains specific provisions required by the Franchise Agreement, an addendum to the lease agreed upon by the landlord, franchisee, and Azal Coffee ensures that those provisions are applicable, overriding any conflicting terms in the original lease. This addendum confirms that the premises will only be used for operating an Azal Coffee during the lease term, including renewals.
Second, when Azal Coffee exercises its option to accept the assignment of a lease (due to the expiration/termination of the Franchise Agreement or lease, or franchisee abandonment), the lease and all rights to the premises are automatically assigned to Azal Coffee without needing further documentation. While a formal document isn't required for the assignment, the landlord and franchisee must execute documents confirming the assignment in a form presented by Azal Coffee, including a short-form lease suitable for recording. This ensures a smooth transfer of the lease and premises to Azal Coffee or its designee.