Is the franchisee required to complete an initial training program as a condition of the Azal Coffee franchise transfer?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| THIS ADDENDUM is made the day of, 20, and modifies a |
|---|
| Franchise Agreement of the same date (the "Franchise Agreement") entered into by Durar Investment, LLC, a Michigan limited liability company, ("Franchisor") and |
| , a(" Franchisee "). In this |
| , a |
| A. Introduction . You entered into an agreement ("Purchase Agreement") for the |
| purchase of the Azal Coffee located at ("Store") from the current owner of the Store (the "Seller"). We and you |
| desire to amend the Franchise Agreement to reflect the fact that you are acquiring an open and |
| operating Store by transfer from one of our existing franchisees. All capitalized terms not otherwise |
| defined in this Addendum will have the same meaning as in the Franchise Agreement. |
| B. Contingency ; Date of Effectiveness of Franchise Agreement . The rights and |
| obligations of the parties under the Franchise Agreement are contingent on: (1) your completion of |
| our initial training program; and (2) the closing of the transaction under the Purchase Agreement and the transfer of possession and ownership of the Store to you. If these contingencies are not |
| met by, 20, we may, at our option, terminate the Franchise Agreement. If |
| we terminate the Franchise Agreement as provided in this Section, we will have the right to retain |
| the transfer fee paid by you (or the Seller) and otherwise the parties will have no further rights or |
| obligations to each other under the Franchise Agreement; provided that, the confidentiality and |
| non-competition provisions of the Franchise Agreement will survive the termination. If these |
| contingencies are met by the date specified above in this Section, then the Franchise Agreement |
| will become effective on the date that |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, if a franchisee is acquiring an existing Azal Coffee store through a transfer, their rights and obligations under the Franchise Agreement are contingent upon completing the initial training program. This means that the transfer of the franchise is dependent on the franchisee's successful completion of the training.
Specifically, the addendum to the Franchise Agreement states that the agreement's effectiveness is contingent on the completion of the initial training program and the closing of the transaction for the store's purchase. If these conditions are not met by a specified date, Azal Coffee has the option to terminate the Franchise Agreement.
If Azal Coffee terminates the agreement due to the non-fulfillment of these contingencies, they have the right to retain the transfer fee paid by the franchisee or seller. However, both parties will have no further obligations to each other under the Franchise Agreement, except for the confidentiality and non-competition provisions, which will remain in effect. If the franchisee meets the requirements, the Franchise Agreement becomes effective on the date of the transfer.