What is the purpose of the Lease Addendum required by Azal Coffee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Your lease must be approved by us. However, we will not evaluate or be responsible for the commercial reasonableness or suitability of your lease. That is your sole responsibility and we recommend that you engage independent counsel to assist you in the evaluation and negotiation of your lease. Also, unless we otherwise agree, you and your landlord must sign a Lease Addendum acknowledging certain rights we have under the Franchise Agreement that relate to your lease and you must sign a Collateral Assignment of Lease that assigns the lease to us at our option on the occurrence of certain events. A copy of our standard Lease Addendum is attached to the Franchise Agreement as Appendix G and a copy of our standard Collateral Assignment of Lease is attached to the Franchise Agreement as Appendix H.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–25)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the Lease Addendum serves to acknowledge certain rights that Azal Coffee has under the Franchise Agreement, specifically as they relate to the franchisee's lease. Additionally, Azal Coffee requires a Collateral Assignment of Lease, which assigns the lease to Azal Coffee at their option if certain events occur.
This requirement means that prospective Azal Coffee franchisees must ensure that their lease agreement includes the Lease Addendum. This addendum protects Azal Coffee's interests by giving them certain rights related to the lease. Franchisees should carefully review Appendix G of the Franchise Agreement, which contains a copy of the standard Lease Addendum, and Appendix H, which contains a copy of the standard Collateral Assignment of Lease.
It is important for franchisees to understand that Azal Coffee will not evaluate or be responsible for the commercial reasonableness or suitability of the lease. Franchisees are solely responsible for this evaluation and are encouraged to seek independent legal counsel to assist in the evaluation and negotiation of the lease. This is a common practice in franchising, as the franchisor wants to ensure its brand is protected without taking on the liability of guaranteeing the lease's suitability for the franchisee's business.