What is the process for Azal Coffee's franchisor to accept the assignment of the lease?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- Use.** The Premises must not be used for any purpose other than the operation of an Azal Coffee during the term of the Lease, including renewals.
- 3. Franchisor's Options. Landlord and Franchisee grant to Franchisor the exclusive right, exercisable at the option of Franchisor, to be assigned all right, title and interest of Franchisee in and to the Lease and the Premises:
- a. on the expiration or termination of the Franchise Agreement. Franchisor must give written notice of its intent to exercise this option within thirty (30) days of the event triggering the option;
- b. on the expiration or termination of the Lease or on Franchisee's loss of its rights of possession to the Premises, whether by Franchisee's default under the Lease or otherwise. Landlord shall provide Franchisor notice of default as provided under Section 9 and Section 10. Franchisor shall exercise its right to accept assignment of the Lease within such periods; and
- c. on Franchisees abandonment of the Premises. For this purpose, abandonment will be conclusively presumed if Franchisee fails to have the business open and fully operational for two (2) consecutive days.
On the giving of notice of exercise by Franchisor under this Section, the Lease, and all right, title and interest of Franchisee under the lease and to the Premises will be automatically, and without need of further instrument, assigned to Franchisor. If Franchisor does not give notice of exercise within the applicable time period, Franchisor will be deemed to have forfeited all its rights under this Section. Landlord and Franchisee agree to execute documents confirming this assignment in the form presented by Franchisor, including a short form of Lease suitable for recording.
4. Franchisor's Rights. Upon Franchisor's exercise of its option to accept assignment of the Lease, Franchisee shall remain liable for any amounts owing, or any other default occurring,
prior to the effective date of the assignment. Franchisor shall not be liable for any amounts owing by Franchisee and shall have no obligation to cure any default of franchisee before taking assignment of the Lease and possession of the Premises. Franchisor shall succeed to all of the Franchisee's rights, options, and obligations under the Lease commencing on the effective date of the assignment and shall have the right to transfer or assign the Lease to another Azal Coffee franchisee without the need to seek consent form Landlord. Franchisor's transfer to another Azal Coffee franchisee relieves Franchisor from any further liability under the Lease. The terms of this Addendum shall remain in full force and effect as to such franchisee-transferee.
- **5.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the franchisor has the exclusive right to be assigned the franchisee's lease. This right can be exercised under specific conditions, including the expiration or termination of the Franchise Agreement, the expiration or termination of the lease, the franchisee's loss of possession of the premises, or the franchisee's abandonment of the premises.
To exercise this option, Azal Coffee must provide written notice within thirty days of the event that triggers the option if it is due to the expiration or termination of the Franchise Agreement. In the event of default or loss of possession, the landlord is required to notify Azal Coffee, who must then exercise their right to accept the lease assignment within the period specified in the notice. Abandonment is presumed if the Azal Coffee business is not fully operational for two consecutive days.
Upon providing notice of exercise, the lease and all rights to the premises are automatically assigned to Azal Coffee without any further documentation needed. If Azal Coffee fails to provide notice within the specified time, they forfeit their rights under this section. Both the landlord and franchisee must execute documents confirming the assignment, including a short form of lease suitable for recording. Upon assignment, the franchisee remains liable for any outstanding amounts or defaults that occurred before the assignment's effective date, while Azal Coffee is not liable for any of the franchisee's debts or defaults. Azal Coffee can then transfer the lease to another Azal Coffee franchisee without needing the landlord's consent, which relieves Azal Coffee of further liability under the lease.