What is the franchisee required to do as a condition of the Azal Coffee transfer to the buyer?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 2. Termination of Franchise Agreement. You and we agree that the Franchise Agreement is terminated as of the effective date of this Agreement.
- Release. As a condition to our consent to your transfer to the Buyer, you release and forever discharge us and our representatives, owners, employees, officers, agents and assigns from all liability, right, claim, debt and cause of action whatsoever, known or unknown, suspected or unsuspected, which you ever had, now have or may have at any time based on any agreement entered into between the parties on or before the date of this Agreement or based on any act or omission occurring on or before the date of this Agreement; provided, that nothing contained in this Section will affect your rights and obligations under this Agreement.
- 4. Your Duties. Effective on the date of this Agreement, and except as may be authorized by any other franchise agreement between us and you, 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 similar to the Franchise 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) Except as assumed by the Buyer, you must immediately discontinue all advertising placed or ordered. Except as transferred to the Buyer, 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.
- (c) You must cease using the Brand Standards Manual, the Confidential Information, Intellectual Property, and all other proprietary business information provided by us and, except as transferred to the Buyer, must return to us all copies of the Brand Standards Manual, the Confidential Information, Intellectual Property, and other bulletins
or other materials received from us containing information about the Intellectual Property and Store.
- (d) Except as transferred to the Buyer, you must immediately and permanently cease to use all telephone and fax numbers, email addresses, website addresses, domain names, social media accounts, 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.
- (e) You must cease using any business name containing any of the Marks and must file an abandonment or discontinuance of the name with the appropriate local, county or state agency.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, a franchisee must fulfill several obligations as a condition for transferring their franchise to a buyer. The Franchise Agreement between the franchisee and Azal Coffee is terminated on the effective date of the transfer. As part of the transfer, the franchisee must release Azal Coffee from all liabilities and claims, whether known or unknown, that they may have against the company.
Effective on the transfer date, the franchisee's rights to use Azal Coffee's intellectual property and franchise systems cease, unless authorized by another agreement. The franchisee must immediately stop using all intellectual property, confidential information, and trademarks associated with Azal Coffee. They must also discontinue all advertising and remove any materials displaying Azal Coffee's intellectual property, returning these items to the company at their own expense. Additionally, the franchisee must stop using the Brand Standards Manual and other proprietary information, returning all copies to Azal Coffee, except what is transferred to the buyer.
Furthermore, the franchisee or the proposed transferee must take actions to ensure the franchise business complies with Azal Coffee's current standards for appearance, trade dress, equipment, and signage, either before or after the transfer. The proposed transferee must not be involved with any business that competes with Azal Coffee. If the transfer involves installment payments, the seller must sign a subordination agreement, giving Azal Coffee priority in receiving payments. The franchisee's landlord must also allow the lease to be transferred to the transferee, and both parties must comply with any other standard procedures specified by Azal Coffee. These conditions are deemed necessary to protect Azal Coffee's franchise system and trademarks and are not considered unreasonable restrictions on the transfer.