What is the significance of capitalized terms in the Azal Coffee Franchise Agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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EXHIBIT D-1
ADDENDUM TO FRANCHISE AGREEMENT-TRANSFER
ADDENDUM TO FRANCHISE AGREEMENT-TRANSFER
| THIS ADDENDUM is made the day of, 20, and modifies a |
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| Franchise Agreement of the same date (the "Franchise Agreement") entered into by Durar Investment, LLC, a Michigan limited liability company, ("Franchisor") and |
| , a(" Franchisee "). In this |
| , a |
| A. Introduction . You entered into an agreement ("Purchase Agreement") for the |
| purchase of the Azal Coffee located at ("Store") from the current owner of the Store (the "Seller"). We and you |
| desire to amend the Franchise Agreement to reflect the fact that you are acquiring an open and |
| operating Store by transfer from one of our existing franchisees. All capitalized terms not otherwise |
| defined in this Addendum will have the same meaning as in the Franchise Agreement. |
| B. Contingency ; Date of Effectiveness of Franchise Agreement . The rights and |
| obligations of the parties under the Franchise Agreement are contingent on: (1) your completion of |
| our initial training program; and (2) the closing of the transaction under the Purchase Agreement and the transfer of possession and ownership of the Store to you. If these contingencies are not |
| met by, 20, we may, at our option, terminate the Franchise Agreement. If |
| we terminate the Franchise Agreement as provided in this Section, we will have the right to retain |
| the transfer fee paid by you (or the Seller) and otherwise the parties will have no further rights or |
| obligations to each other under the Franchise Agreement; provided that, the confidentiality and |
| non-competition provisions of the Franchise Agreement will survive the termination. If these |
| contingencies are met by the date specified above in this Section, then the Franchise Agreement |
| will become effective on the date that you receive possession and ownership of the Store (the "Effective Date"). |
| Ellective Date ). |
| C. Refurbishing of Franchise Location. You must complete the refurbishing, |
| updating, upgrading, construction and/or improvement of the Franchise Location and the |
| equipment, fixtures and signs at the Franchise Location as specified below. These actions must |
| be completed within 90 days of the date of the Effective Date of this Addendum. |
| D. Initial Franchise Fee; Transfer Fee . You are not required to pay the initial |
| D. Initial Franchise Fee; Transfer Fee . You are not required to pay the initial franchise fee specified in Section 4.1 of the Franchise Agreement. In lieu of the initial franchise fee, |
| you (or the Seller) must pay a transfer fee in the amount of $ The transfer fee is |
| payable on or before the signing of this Addendum. |
| E. Services Provided to You . Section 5 of the Franchise Agreement is amended as |
| follows: (1) Section 5.5 is deleted. |
| (1) Section 5.5 is deleted. |
| (2) The first se |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, capitalized terms within the franchise agreement and its addenda have specific, defined meanings. This is a standard legal practice to ensure clarity and avoid ambiguity in contractual language. When a term is capitalized, it indicates that the term has a particular definition that is outlined within the agreement itself.
For example, the term "Franchise Business" refers specifically to the Azal Coffee store that the franchisee is licensed to operate under the agreement. Similarly, "Franchise Marks" and "Franchise Trade Dress" refer to the trademarks, service marks, logos, and visual appearance elements that Azal Coffee authorizes the franchisee to use. The "Systems" encompass the comprehensive operational methods, standards, and specifications that define the Azal Coffee franchise. Understanding these defined terms is crucial for franchisees to fully grasp their rights, responsibilities, and the scope of the franchise being granted.
In the context of an addendum to the Franchise Agreement, such as when transferring ownership of an existing Azal Coffee store, the document explicitly states that all capitalized terms not defined within the addendum itself will carry the same meaning as in the original Franchise Agreement. This ensures consistency and avoids the need to redefine common terms across multiple documents. Franchisees should pay close attention to these capitalized terms and their definitions to ensure they understand the specific obligations and rights associated with each term, as they are legally binding and can significantly impact the operation of their Azal Coffee franchise.