What happens if Azal Coffee exercises its right of first refusal to acquire my business?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
or assets of the |
| Provision | Section in Agreement | Summary |
|---|---|---|
| franchise. Sublicensing of your rights is not a permitted transfer. | ||
| l. Our approval of a transfer by you | Sections 14.2 and 14.3 of Franchise Agreement | You must have our written consent to transfer your franchise. We will not unreasonably withhold consent to a permitted transfer. |
| m. Conditions for our approval of the transfer | Section 14.3 of Franchise Agreement | The proposed transferee meets the conditions we have set for any new franchisee; we find the terms of the proposed transfer to be reasonable , you must be in compliance with all obligations to us and must pay us and all suppliers all monies owing; release signed by you; the new franchisee completes training; the new franchisee signs, at our option, a new Franchise Agreement on the standard form in use by us at the time of the transfer or an assumption of the existing Franchise Agreement; transfer fee paid; you or the proposed transferee must take action specified by us to comply with current appearance, equipment, and signage requirements; proposed transferee and affiliates are not in competition with a Azal Coffee; subordination agreement signed by you (if installment payments required); |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–47)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee has the right of first refusal to acquire your business. This means that if you receive an offer to purchase your Azal Coffee franchise, you must first give Azal Coffee the opportunity to match that offer.
Per the FDD, Azal Coffee can match any offer for the purchase of your business, as detailed in Section 14.2 of the Franchise Agreement. If Azal Coffee exercises this right, they will purchase your franchise business under the same terms and conditions as the offer you received from the third party.
This provision is common in franchise agreements, allowing franchisors like Azal Coffee to maintain control over their brand and the selection of franchisees. As a prospective franchisee, it's important to understand the implications of this right of first refusal, as it could impact your ability to sell your franchise to a buyer of your choice.