Is an Azal Coffee franchisee required to maintain possession of the Franchise Location to renew?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You will have the option to remain an Azal Coffee franchisee for two (2) additional periods of five (5) years if, at the beginning of the option period, all of the following conditions are fulfilled:
- (a) You are not in default under this Agreement or any other agreement with us or our affiliates and no affiliate of yours is in default under any agreement with us or our affiliates.
- (b) Within the last thirty-six (36) months we have not sent you two (2) or more notices of default of the terms of this Agreement or of any of our specifications, standards, or operating procedures (whether or not the notices related to the same or different violations and whether or not you have remedied those violations).
- (c) You provide written notice of your intent to continue as a franchisee not more than twelve (12) months and not less than six (6) months before the beginning of the option period.
- (d) You are able to maintain possession of the Franchise Location or you have been able to secure and develop, in compliance with our then applicable standards used in the granting of a franchise, suitable alternative premises within your Protected Area for your Store. Any alternative premises must be acceptable to and approved in advance by us.
- (e) You agree to take any action specified by us to make the Franchise Business comply with current appearance, Franchise Trade Dress, equipment, fixture, and signage requirements. You acknowledge that we may not uniformly impose refurbishing obligations on renewal of our franchises based on numerous factors and that we may require you to take steps to refurbish the Franchise Location that we have not required of other franchisees.
- (f) Throughout the term of this Agreement you have satisfied all material reporting requirements and all monetary obligations to us and our affiliates, suppliers, vendors, and creditors (excepting reasonable disputes that you are attempting in good faith to resolve) within the amount of time specified for satisfaction or cure of default with respect to the obligation.
- (g) You have satisfied any current training requirements for new or existing franchisees.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, to renew the franchise agreement for two additional five-year periods, a franchisee must be able to maintain possession of the franchise location. However, the franchisee can also secure and develop a suitable alternative premises within their protected area, provided it meets Azal Coffee's standards for granting a franchise and receives advance approval from Azal Coffee.
Several other conditions must be met to qualify for renewal. The franchisee must not be in default under any agreement with Azal Coffee or its affiliates. Additionally, Azal Coffee must not have sent the franchisee two or more notices of default within the 36 months before the option period. The franchisee must also provide written notice of their intent to continue as a franchisee, no more than 12 months and no less than 6 months before the beginning of the option period.
Furthermore, the franchisee must agree to take any action specified by Azal Coffee to ensure the franchise business complies with current appearance, trade dress, equipment, fixture, and signage requirements. The document notes that Azal Coffee may not uniformly impose refurbishing obligations and may require specific refurbishments that differ from other franchisees. The franchisee must also have satisfied all material reporting requirements and monetary obligations throughout the agreement's term. Finally, the franchisee must meet any current training requirements for new or existing franchisees.
This indicates that while maintaining the original location is preferred, Azal Coffee provides an alternative for renewal if the franchisee can secure a suitable new location within their protected area, subject to approval and compliance with current standards. However, franchisees should be prepared for potential refurbishing obligations that may not be uniformly applied across all locations.