What standards must a proposed Azal Coffee transferee meet to be approved?
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.
You acknowledge that the conditions listed above are necessary for protection of the Franchise Marks and Franchise Systems and do not impose unreasonable restrictions on a Transfer.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, several standards must be met for a proposed transferee to be approved. The current franchisee or the proposed transferee must take actions to ensure the franchise business complies with Azal Coffee's current appearance, trade dress, equipment, and signage requirements. These actions may be required before or after the transfer. The proposed transferee, along with its owners, shareholders, officers, directors, partners, members, investors, employees, agents, family members, and affiliates, must not be involved with any business that competes with Azal Coffee. The transferee may need to sign an acknowledgement of compliance with this prohibition upon request.
If the transfer involves installment payments from the transferee to the seller, the seller must sign a subordination agreement. This agreement subordinates the seller's right to receive installment payments to Azal Coffee's right to receive all amounts due through the installment's due date. The subordination agreement must follow Azal Coffee's specified format and terms. Additionally, the landlord must permit the lease for the franchise location to be transferred to the transferee. Finally, the current franchisee, the seller, and the proposed transferee must comply with any other standard procedures specified by Azal Coffee.
Azal Coffee emphasizes that these conditions are necessary to protect the franchise marks and systems and are not considered unreasonable restrictions on the transfer. Prospective franchisees should be aware of these requirements, as they can impact the transfer process and the approval of potential transferees. Ensuring compliance with these standards is crucial for a smooth transfer and continued operation within the Azal Coffee franchise system.