Does Azal Coffee require franchisees to represent and warrant that they are not identified on the U.S. Treasury Department's Office of Foreign Assets Control lists?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
uire us to disclose or grant to you a like or similar variation.
19.5 Terrorist and Money Laundering Activities.
You and your owners, officers, directors, members, partners, and agents represent and warrant to us that: (a) you and they are not identified by name or alias, pseudonym or nickname, on the lists of "Specially Designated Nationals" or "Blocked Persons" maintained by the U.S. Treasury Department's Office of Foreign Assets Control; (b) you and they are not directly or indirectly owned or controlled by the government of any country that is subject to a United States embargo; (c) you and they will not act directly or indirectly on behalf of the government of any country that is subject to a United States embargo; and (d) you and they are in full compliance with all laws proscribing money laundering and corrupt practices. Further, you and your owners, officers, directors, members, partners, and agents represent and warrant to us that you and they have not violated and agree not to violate any law prohibiting corrupt business practices, money laundering or the aid or support of persons who conspire to commit acts of terror against any person or government,
including acts prohibited by the USA Patriot Act, U.S. Executive Order 13244, or any similar law. The foregoing constitutes continuing representations and warranties, and you and your owners, officers, directors, members, partners, and agents must immediately notify us in writing of the occurrence of any event or the development of any circumstance that might render any of the foregoing representations and warranties false, inaccurate, or misleading.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees and their owners, officers, directors, members, partners, and agents must represent and warrant that they are not identified on the lists of "Specially Designated Nationals" or "Blocked Persons" maintained by the U.S. Treasury Department’s Office of Foreign Assets Control. They must also represent that they are not directly or indirectly owned or controlled by the government of any country that is subject to a United States embargo, and that they will not act directly or indirectly on behalf of the government of any country that is subject to a United States embargo.
This requirement ensures that Azal Coffee complies with U.S. laws and regulations regarding terrorist financing and money laundering. It protects Azal Coffee from potential legal and reputational risks associated with doing business with individuals or entities on these lists or those associated with embargoed countries.
The franchisee must also warrant that they are in full compliance with all laws proscribing money laundering and corrupt practices, and that they have not violated and agree not to violate any law prohibiting corrupt business practices, money laundering or the aid or support of persons who conspire to commit acts of terror against any person or government. Furthermore, the franchisee has a continuing obligation to notify Azal Coffee immediately in writing if any event or circumstance occurs that might render any of these representations and warranties false, inaccurate, or misleading. This places an ongoing responsibility on the franchisee to remain compliant and transparent.
This type of clause is relatively standard in franchise agreements to mitigate risks and ensure compliance with applicable laws. A prospective Azal Coffee franchisee should carefully review these requirements and ensure they can fully comply before entering into a franchise agreement.