factual

Does Azal Coffee have state-specific addenda to the franchise agreement?

Azal_Coffee Franchise · 2024 FDD

Answer from 2024 FDD Document

State Cover Page Notice under Michigan Franchise Inv. Law F List of Azal Coffee Franchisees
A List of State Administrators and List of Agents for Service of Process G List of Franchisees That Have Left the System
B Franchise Agreement H Financial Statements
C Renewal Addendum I State Specific Disclosures and Addenda
D1 Transfer Addendum J State Effective Dates
D2 Franchise Termination and Release Agreement K Receipt (2 Copies)
E Confidentiality/Non-Competition Agreement
  • (e) In conformance with Section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
  • (f) No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

INDIANA

    1. REGISTRATION OF THIS FRANCHISE IN THE STATE OF INDIANA DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER.
    1. The following is in addition to the disclosure in Item 8 of the Franchise Disclosure Document:

The requirement for you to purchase products from us or some other entity as we designate in writing, may be unlawful under Indiana Law. Under the Franchise Agreement amended for use in Indiana, if, and to the extent, that requirement is found to be unlawful, that requirement will be void (to the extent unlawful) and you must purchase those products from approved suppliers.

    1. The following is in addition to the disclosure in Item 12 of the Franchise Disclosure Document:
  • (a) Under the Franchise Agreement amended for use in Indiana, we are prohibited from establishing a Franchisor owned outlet engaged in a substantially identical business to that of the Franchise Business within your Protected Area, whether or not the business is operated under the Franchise Marks.
    1. The following is in addition to the disclosure in Item 17 of the Franchise Disclosure Document:
  • (a) Under the Franchise Agreement amended for use in Indiana, the post-termination non-competition covenant only applies to your Protected Area and does not include the areas within a radius of any other Azal Coffee franchise location.
  • (b) The Franchise Agreement amended for use in the State of Indiana specifies that the Agreement and the construction of the Agreement will be governed by the laws of the State of Michigan except that the Indiana Franchise Law (Indiana Code 23-2-2.5 and 23-2-2.7) will control where applicable.

NEW YORK

  1. REGISTRATION OF THIS FRANCHISE BY NEW YORK STATE DOES NOT MEAN THAT NEW YORK STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT. IF YOU LEARN THAT ANYTHING IN THE DISCLOSURE DOCUMENT IS UNTRUE, CONTACT THE FEDERAL TRADE COMMISSION AND NEW YORK STATE DEPARTMENT OF LAW, BUREAU OF INVESTOR PROTECTION AND SECURITIES, 120 BROADWAY, 23RD FLOOR, NEW YORK, NEW YORK 10271.

THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE DISCLOSURE DOCUMENT. HOWEVER, THE FRANCHISOR CANNOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS THAT ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS DISCLOSURE DOCUMENT.

  • (b) Situs of Arbitration Proceedings: Franchise agreements providing that the parties must agree to the arbitration of disputes at a location that is remote from the site of the franchisee's business.
  • (c) Restrictions on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
  • (d) Liquidated Damages and Termination Penalties: Requiring North Dakota franchisees to consent to liquidated damages or termination penalties.
  • (e) Applicable Laws: Franchise agreements, which specify that they are to be governed by the laws of a state other than North Dakota.
  • (f) Waiver of Trial by Jury: Requiring North Dakota franchisees to consent to a waiver of a trial by jury.
  • (g) Waiver of Exemplary and Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages.
  • (h) General Release: Franchise Agreements that require the franchisee to sign a general release on renewal of the franchise agreement.
  • (i) Limitation of Claims: Franchise Agreements that require the franchisee to consent to a limitation of claims. The statute of limitations under North Dakota law applies.
  • (j) Enforcement of Agreement: Franchise Agreements that require the franchisee to pay all costs and expenses incurred by the franchisor in enforcing the agreement. The prevailing party in any enforcement action is entitled to recover all costs and expenses including attorneys' fees.

RHODE ISLAND

    1. The following is in addition to the disclosure in Item 17 of the Franchise Disclosure Document:
  • § 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void wi

Source: Item 23 — RECEIPTS (FDD pages 51–204)

What This Means (2024 FDD)

Yes, according to Azal Coffee's 2024 Franchise Disclosure Document, the franchise agreement may have state-specific addenda. Item 23 includes a section specifically for "State Specific Disclosures and Addenda," indicating that such addenda exist. Furthermore, the document provides specific examples of addenda for franchisees in Indiana, New York, North Dakota, and Rhode Island.

For Indiana, the FDD states that certain provisions in the standard franchise agreement are amended for use in Indiana. These amendments address issues such as the purchase of products from designated suppliers, the establishment of franchisor-owned outlets within a franchisee's protected area, and the applicability of post-termination non-competition covenants. The Indiana Franchise Law takes precedence where applicable, despite the agreement being governed by Michigan law.

For New York, the FDD notes that the franchisor may negotiate terms but cannot impose terms less favorable than those in the disclosure document. The document also includes additional litigation disclosures specific to New York.

For North Dakota, the FDD lists several restrictions that cannot be imposed on franchisees, including mandatory arbitration locations, restrictions on forum, liquidated damages, choice of law, jury trial waivers, waivers of damages, general releases, limitations of claims, and enforcement of agreement terms. For Rhode Island, the FDD states that any provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of other states' laws is void.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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