Does Azal Coffee grant franchisees an exclusive territory?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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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
The rights granted to you in the Franchise Agreement relate only to the sale of products over-the-counter at the Franchise Location, and you are not granted any exclusive area or other territorial rights, except as described above.
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 means that a franchisee may face competition from other franchises, outlets owned by Azal Coffee, other distribution channels, or competitive brands controlled by Azal Coffee.
The Protected Area extends within a 2 to 5-mile radius from the front door of the franchise location. The radius may be less than 2 miles in densely populated areas, with the specific area agreed upon and detailed in Item 2 of Appendix A to the Franchise Agreement. The franchisee's rights are limited to location and do not provide exclusivity over marketing, customers, or delivery areas. All stores can sell and deliver products to any customer, even within another franchisee's Protected Area, without compensation to that franchisee. Azal Coffee may also authorize third-party deliveries within a franchisee's Protected Area.
Azal Coffee and its affiliates retain the right 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 (like grocery stores and warehouse clubs), offsite events, stadiums, locations with relatively fixed populations (such as airports, military bases, college campuses, hospitals, indoor regional malls, and large office buildings), and mobile locations like food trucks. Franchisees also do not have options or rights to acquire additional franchises within any specified or contiguous territories. These limitations and reservations of rights mean that while franchisees have some territorial protection, Azal Coffee retains significant flexibility to operate and authorize other businesses within and around the Protected Area.