Does Azal Coffee grant an exclusive territory to its franchisees?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 12: TERRITORY]
Rights in Protected Area
You will not receive an exclusive territory. You may face competition from other franchises, from outlets that we own, or from other channels of distribution or competitive brands that we control. As described below, we do grant you limited rights in your Protected Area.
As long as your Franchise Agreement is in effect and you are not in default, we will not open or authorize any other person to open an Azal Coffee at a location in the area that is within a 2 to 5-mile radius from the front door of the Franchise Location (the "Protected Area"). If the Franchise Location is in a densely populated area, the Protected Area may be less than a 2-mile radius. In that case, the area will be agreed to and will be described in Item 2 of Appendix A to the Franchise Agreement. Your limited rights relate to location only and do not grant you any exclusivity of marketing, customers, or delivery area. Subject to any specifications and policies for catering and delivery and limitations on catering and delivery areas we specify, all Stores may sell and deliver their products and services to any customer, even if the customer is within your Protected Area or the protected area of another franchisee. We and other franchisees are not required to pay any compensation to you for soliciting or accepting orders inside your Protected Area. We may also authorize third-party deliveries to be made inside your Protected Area.
As exceptions to your limited rights in your Protected Area, we and our affiliates may operate or authorize other persons to operate businesses under the Franchise Marks and Franchise Systems and/or to offer and sell products and services offered at Stores at the following types of locations in the Protected Area: corporate cafeterias; food trucks; ghost kitchens; institutional accounts (including grocery stores and warehouse clubs); offsite events (e.g. art fairs, fundraisers, etc.); stadiums; and locations with relatively fixed populations (e.g. airports, military bases, college campuses, hospitals and other medical facilities, indoor regional malls, certain large office buildings where a portion of the inhabitants do not leave the building for lunch and few people from outside the building come in for lunch); similar locations; and mobile locations, such as food trucks.
Limitations; Reservation of Rights
You will not have any options, rights of first refusal or similar rights to acquire additional franchises within any specified territory or any contiguous territories.
Source: Item 12 — TERRITORY (FDD pages 36–38)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees do not receive an exclusive territory. However, Azal Coffee does grant franchisees limited rights within a Protected Area. This Protected Area typically spans a 2 to 5-mile radius from the front door of the franchise location, although this may be less in densely populated areas, as agreed upon and detailed in Item 2 of Appendix A to the Franchise Agreement.
Even within this Protected Area, franchisees may face competition from other franchises, company-owned outlets, alternative distribution channels, and competitive brands controlled by Azal Coffee. The franchisee's rights are limited to location, without exclusivity over marketing, customers, or delivery areas. All stores, including the franchisee's, can sell and deliver to any customer, even those within another franchisee's Protected Area, without any obligation to provide compensation. Azal Coffee also retains the right to authorize third-party deliveries within a franchisee's Protected Area.
Azal Coffee and its affiliates reserve the right to operate or authorize others to operate businesses under the Franchise Marks and Franchise Systems, offering similar products and services at various locations within the Protected Area. These locations include corporate cafeterias, food trucks, ghost kitchens, institutional accounts, offsite events, stadiums, locations with relatively fixed populations like airports and college campuses, indoor regional malls, large office buildings, and mobile locations such as food trucks. Franchisees also do not have options or rights to acquire additional franchises within any specified territory.