Does the Azal Coffee franchise agreement allow for modifications via addendum?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
provision supersedes any other term of any document executed in connection with the franchise.
INDIANA
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- REGISTRATION OF THIS FRANCHISE IN THE STATE OF INDIANA DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER.
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- The following is in addition to the disclosure in Item 8 of the Franchise Disclosure Document:
The requirement for you to purchase products from us or some other entity as we designate in writing, may be unlawful under Indiana Law. Under the Franchise Agreement amended for use in Indiana, if, and to the extent, that requirement is found to be unlawful, that requirement will be void (to the extent unlawful) and you must purchase those products from approved suppliers.
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- The following is in addition to the disclosure in Item 12 of the Franchise Disclosure Document:
- (a) Under the Franchise Agreement amended for use in Indiana, we are prohibited from establishing a Franchisor owned outlet engaged in a substantially identical business to that of the Franchise Business within your Protected Area, whether or not the business is operated under the Franchise Marks.
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- The following is in addition to the disclosure in Item 17 of the Franchise Disclosure Document:
- (a) Under the Franchise Agreement amended for use in Indiana, the post-termination non-competition covenant only applies to your Protected Area and does not include the areas within a radius of any other Azal Coffee franchise location.
- (b) The Franchise Agreement amended for use in the State of Indiana specifies that the Agreement and the construction of the Agreement will be governed by the laws of the State of Michigan except that the Indiana Franchise Law (Indiana Code 23-2-2.5 and 23-2-2.7) will control where applicable.
MARYLAND
- The following is in addition to the disclosure in Item 17 of the Franchise Disclosure Document:
ANY RELEASE CONTAINED IN THE FRANCHISE AGREEMENT OR ANY OTHER AGREEMENT REQUIRED AS A CONDITION OF THE SALE, RENEWAL OR TRANSFER OF THE FRANCHISE WILL NOT APPLY TO ANY LIABILITY UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW.
THE FRANCHISE AGREEMENT SPECIFIES THE APPLICATION OF MICHIGAN LAWS AND MICHIGAN VENUE FOR LITIGATION;
Source: Item 23 — RECEIPTS (FDD pages 51–204)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, the franchise agreement can be modified via addenda, particularly to comply with state-specific laws. For instance, the Indiana disclosures mention amendments to the standard franchise agreement. Specifically, the Indiana Franchise Agreement is amended to clarify that certain requirements to purchase products from the franchisor or designated suppliers may be unlawful under Indiana law, and if found unlawful, those requirements will be voided to the extent necessary.
Furthermore, the Indiana agreement is amended to prevent Azal Coffee from establishing a franchisor-owned outlet engaged in a substantially identical business within the franchisee's protected area. The post-termination non-competition covenant in Indiana only applies to the franchisee's protected area and does not extend to areas within a radius of other Azal Coffee franchise locations. The Indiana Franchise Agreement also specifies that the laws of Michigan govern the agreement, except where Indiana Franchise Law controls.
Additionally, the Item 23 Receipts checklist includes "State Specific Disclosures and Addenda," suggesting that addenda are used to address state-specific legal requirements or modifications to the standard franchise agreement. This indicates that Azal Coffee is willing to make changes to the franchise agreement through addenda to comply with varying state regulations and to tailor certain terms to specific jurisdictions.