What standards of character, business experience, and financial strength must a proposed Azal Coffee transferee meet?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (i) You or the proposed transferee must take any action specified by us to make the Franchise Business comply with current appearance, Franchise Trade Dress, equipment, and signage requirements. We may require this action to be taken before the Transfer or within a specified period of time after the Transfer.
- (j) The proposed transferee and its owners, shareholders, officers, directors, partners, members, investors, employees and agents, and their Family Members and affiliates of the proposed transferee must not be an owner, shareholder, officer, director, partner, member, investor, employee, agent or consultant of or to a business that competes with Azal Coffee. On our request, the transferee may be required to sign an acknowledgement of compliance with this prohibition.
- (k) If the transfer involves installment payments by the transferee to the Seller, the Seller must sign a subordination agreement under which the Seller subordinates its right to receive any installment from the transferee to our right to receive all amounts due to us through the due date of the installment. The subordination agreement must be in a format and contain terms and conditions specified by us.
- (I) Your landlord must allow the lease for the Franchise Location to be transferred to the transferee.
- (m) You, the Seller, and the proposed transferee must comply with any other standard procedures specified by us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, a proposed transferee must meet certain standards to be approved. The transferee, along with their owners, shareholders, officers, directors, partners, members, investors, employees, and agents, including their family members and affiliates, cannot be involved with any business that competes with Azal Coffee. The transferee may be required to sign an acknowledgement of compliance with this prohibition upon request.
Additionally, if the transfer involves installment payments from the transferee to the seller, the seller must sign a subordination agreement. This agreement ensures that the seller's right to receive installment payments is secondary to Azal Coffee's right to receive any amounts due. The subordination agreement must be in a format and contain terms and conditions specified by Azal Coffee.
Furthermore, the landlord must allow the lease for the franchise location to be transferred to the transferee. The franchisee, the seller, and the proposed transferee must also comply with any other standard procedures specified by Azal Coffee. The franchisor also requires that the franchisee or proposed transferee take any action specified to make the Franchise Business comply with current appearance, Franchise Trade Dress, equipment, and signage requirements. These actions may be required before or after the transfer.