What are Azal Coffee's options regarding the agreement the proposed transferee must sign?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
ay require this action to be taken before the Transfer or within a specified period of time after the Transfer.
- (j) The proposed transferee and its owners, shareholders, officers, directors, partners, members, investors, employees and agents, and their Family Members and affiliates of the proposed transferee must not be an owner, shareholder, officer, director, partner, member, investor, employee, agent or consultant of or to a business that competes with Azal Coffee. On our request, the transferee may be required to sign an acknowledgement of compliance with this prohibition.
- (k) If the transfer involves installment payments by the transferee to the Seller, the Seller must sign a subordination agreement under which the Seller subordinates its right to receive any installment from the transferee to our right to receive all amounts due to us through the due date of the installment. The subordination agreement must be in a format and contain terms and conditions specified by us.
- (I) Your landlord must allow the lease for the Franchise Location to be transferred to the transferee.
- (m) You, the Seller, and the proposed transferee must comply with any other standard procedures specified by us.
You acknowledge that the conditions listed above are necessary for protection of the Franchise Marks and Franchise Systems and do not impose unreasonable restrictions on a Transfer.
14.4 Transfer on Death or Incapacity.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, there are several agreements that a proposed transferee may need to sign. Azal Coffee can require the proposed transferee to sign an acknowledgement of compliance stating that they, along with their owners, shareholders, officers, directors, partners, members, investors, employees, agents, family members, and affiliates, are not involved with any business that competes with Azal Coffee.
Additionally, if the transfer involves installment payments from the transferee to the seller, the seller must sign a subordination agreement. This agreement ensures that Azal Coffee's right to receive any amounts due from the franchisee takes precedence over the seller's right to receive installment payments from the transferee until all amounts owed to Azal Coffee are paid. The subordination agreement must be in a format and contain terms and conditions specified by Azal Coffee.
Furthermore, in the event of a transfer, Azal Coffee requires the franchisee to release them from any liability. As a condition of Azal Coffee's consent to the transfer to the buyer, the franchisee must release and forever discharge Azal Coffee and its 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 the franchisee ever had, now has, 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.