Does an Azal Coffee franchisee receive additional compensation for assigning ownership of intellectual property to the franchisor?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
If this Agreement expires or terminates for any reason (including termination on a transfer), your rights to use the Intellectual Property and the Franchise Systems and all other rights associated with being an authorized Azal Coffee franchisee will cease and you must do the following:
- (a) You must immediately and permanently discontinue the use of the Intellectual Property, the Confidential Information, the Franchise Systems, and any trademarks, names, and logos confusingly similar to the Marks or Trade Dress, and any other materials that may, in any way, indicate that you are or were an Azal Coffee franchisee, or in any way associated with us.
- (b) You must immediately discontinue all advertising placed or ordered. You must remove and deliver to us all sign faces, advertising and promotional material, letterhead, forms, and any other items containing the Intellectual Property or the Confidential Information. You are responsible for the cost of sign and other identification removal and the cost of shipping signs and other materials to us. If you remain in possession of the Franchise Location, you must alter the premises to distinguish the premises from the appearance of a Store.
- (c) You must cease using the Brand Standards Manual, the Confidential Information, and all other proprietary business information provided by us and must return to us all copies of the Brand Standards Manual, the Confidential Information, and other bulletins or other materials received from us containing information about the Intellectual Property and Stores.
- (d) You must immediately and permanently cease to use all telephone and fax numbers, email addresses, website addresses, domain names and other electronic media that have been used in the Franchise Business (the "Telephone Numbers" and "Electronic Media") and if requested by us, must assign some or all of these Telephone Numbers and Electronic Media to us. You acknowledge that as between you and us, we have the sole right to all Telephone Numbers and Electronic Media used in the Franchise Business and all written and online directory listings associated with the Franchise Business. You authorize us, and appoint us and any of our officers as your attorney-in-fact, to direct the applicable service providers and all listing agencies to transfer those items to us or our agent or assignee if you fail or refuse to do so. You authorize the applicable service providers and all listing agencies to accept the direction in this Agreement as conclusive evidence of our exclusive rights in the Telephone Numbers and Electronic Media and directory listings and our authority to direct their transfer.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
The 2024 Azal Coffee Franchise Disclosure Document does not explicitly state that a franchisee will receive additional compensation for assigning ownership of intellectual property to the franchisor. However, the document does state that if the Franchise Agreement expires or terminates, the franchisee's rights to use the Intellectual Property and Franchise Systems cease, and the franchisee must discontinue using the Intellectual Property.
The Azal Coffee franchise agreement requires franchisees to assign all Telephone Numbers and Electronic Media associated with their franchise business to the franchisor. This includes telephone and fax numbers, as well as various forms of digital media used for advertising and marketing. The franchisee also appoints an officer of Azal Coffee as their attorney-in-fact to facilitate the transfer of these assets.
While the FDD outlines the franchisee's obligations to assign certain assets to Azal Coffee, it remains silent on whether the franchisee receives any compensation for doing so. A prospective franchisee should seek clarification from the franchisor regarding compensation or other benefits associated with the assignment of intellectual property or other assets.