Under what circumstances is neither party responsible for a contingency under the Azal Coffee franchise agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| THIS ADDENDUM is made the day of, 20, and modifies a |
|---|
| 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 ). |
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, in the event that a franchisee is acquiring an existing Azal Coffee store from a previous franchisee, the rights and obligations of both parties are contingent on specific conditions. These conditions include the completion of the initial training program by the franchisee and the successful closing of the transaction, which involves the transfer of possession and ownership of the store to the new franchisee.
If these contingencies are not fulfilled by a specified date, the franchisor has the option to terminate the Franchise Agreement. Should Azal Coffee choose to terminate the agreement under these circumstances, it retains the right to keep the transfer fee that was paid by the franchisee (or the seller).
In this scenario, if the agreement is terminated due to unmet contingencies, neither party will have any further rights or obligations to each other under the Franchise Agreement. However, it's important to note that the confidentiality and non-competition provisions of the Franchise Agreement will still remain in effect even after the termination. If the contingencies are met by the specified date, the Franchise Agreement becomes effective on the date the franchisee receives possession and ownership of the store.