Can an Azal Coffee franchisee engage in wholesale or distribution of any product of the System?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not have any parents or predecessors. We have two affiliate(s). Our affiliate, V60 Coffee, LLC ("V60"), opened an Azal Coffee similar to the franchise being offered here in September 2023. V60's principal place of business is the same as ours. Our affiliate Azal Wholesale, LLC ("Wholesale") provides certain goods required to be purchased by our franchisees, including coffee beans, tea, coffee and tea mixes, equipment, paper products, syrups, sauces, milk, cups, mugs, branded products, coffee supplies, bakery goods, uniforms, and other inventory items. Wholesale's principal place of business is the same as ours. We or our affiliates, now existing or later created, may provide additional goods and services to our franchisees.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 42)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, it is not explicitly stated whether a franchisee can engage in wholesale or distribution of the System's products. However, the document mentions that Azal Wholesale, LLC, an affiliate of Azal Coffee, provides certain goods required to be purchased by franchisees. These goods include coffee beans, tea, coffee and tea mixes, equipment, paper products, syrups, sauces, milk, cups, mugs, branded products, coffee supplies, bakery goods, uniforms, and other inventory items.
Given that Azal Coffee's affiliate, Azal Wholesale, LLC, handles the distribution of goods to franchisees, it is unlikely that individual franchisees are permitted to engage in wholesale or distribution activities themselves. The FDD does not explicitly prohibit franchisees from engaging in wholesale activities, but it does outline that franchisees must operate their business according to the Franchise Systems.
To gain clarity on whether franchisees are allowed to engage in wholesale or distribution of Azal Coffee products, a prospective franchisee should seek clarification from the franchisor. Specifically, they should inquire about the possibility of engaging in wholesale activities and whether there are any restrictions or requirements related to such activities. Understanding the franchisor's stance on this matter is crucial for making an informed decision about investing in an Azal Coffee franchise.