What is the standard radius of the Protected Area granted to Azal Coffee franchisees?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
ed rights in your Protected Area.
As long as your Franchise Agreement is in effect and you are not in default, we will not open or authorize any other person to open an Azal Coffee at a location in the area that is within a 2 to 5-mile radius from the front door of the Franchise Location (the "Protected Area"). If the Franchise Location is in a densely populated area, the Protected Area may be less than a 2-mile radius. In that case, the area will be agreed to and will be described in Item 2 of Appendix A to the Franchise Agreement. Your limited rights relate to location only and do not grant you any exclusivity of marketing, customers, or delivery area. Subject to any specifications and policies for catering and delivery and limitations on catering and delivery areas we specify, all Stores may sell and deliver their products and services to any customer, even if the customer is within your Protected Area or the protected area of another franchisee. We and other franchisees are not required to pay any compensation to you for soliciting or accepting orders inside your Protected Area. We may also authorize third-party deliveries to be made inside your Protected Area.
As exceptions to your limited rights in your Protected Area, we and our affiliates may operate or authorize other persons to operate businesses under the Franchise Marks and Franchise Systems and/or to offer and sell products and services offered at Stores at the following types of locations in the Protected Area: corporate cafeterias; food trucks; ghost kitchens; institutional accounts (including grocery stores and warehouse clubs); offsite events (e.g. art fairs, fundraisers, etc.); stadiums; and locations with relatively fixed populations (e.g. airports, military bases, college campuses, hospitals and other medical facilities, indoor regional malls, certain large office buildings where a portion of the inhabitants do not leave the building for lunch and few people from outside the building come in for lunch); similar locations; and mobile locations, such as food trucks.
Limitations;
Source: Item 12 — TERRITORY (FDD pages 36–38)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees do not receive an exclusive territory, but they are granted limited rights within a Protected Area. The standard radius of this Protected Area is between 2 to 5 miles from the front door of the franchise location. However, this radius may be smaller than 2 miles if the franchise is located in a densely populated area. In such cases, the specific radius will be agreed upon and detailed in Item 2 of Appendix A to the Franchise Agreement.
It is important to note that these rights are limited to location only and do not provide any exclusivity regarding marketing, customers, or delivery areas. Azal Coffee and other franchisees can still market to and deliver to customers within a franchisee's Protected Area without any obligation to provide compensation. Furthermore, Azal Coffee retains the right to authorize third-party deliveries within the Protected Area.
Azal Coffee and its affiliates also reserve the right to operate or authorize others to operate businesses under the Franchise Marks and Franchise Systems, offering similar products and services at various locations within the Protected Area. These locations include corporate cafeterias, food trucks, ghost kitchens, institutional accounts, offsite events, stadiums, locations with relatively fixed populations (such as airports, military bases, and college campuses), indoor regional malls, certain large office buildings, and mobile locations like food trucks. These exceptions significantly limit the protection a franchisee receives.
Prospective Azal Coffee franchisees should be aware that the Protected Area offers limited protection against competition, and they should carefully consider the potential impact of these exceptions on their business. It is crucial to review Item 2 of Appendix A in the Franchise Agreement to understand the specific radius and any additional conditions applicable to their location.