Under what condition is each provision of the addendum effective for Azal Coffee franchisees?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
franchise agreement.
- (d) Any provision of the Agreement specifying a state other than Illinois as the forum for litigation is void with respect to any cause of action that is otherwise enforceable in the State of Illinois
- (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
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- REGISTRATION OF THIS FRANCHISE IN THE STATE OF INDIANA DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER.
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- 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.
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- 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.
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- 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.
MARYLAND
- The following is in addition to the disclosure in Item 17 of the Franchise Disclosure Document:
ANY RELEASE CONTAINED IN THE FRANCHISE AGREEMENT OR ANY OTHER AGREEMENT REQUIRED AS A CONDITION OF THE SALE, RENEWAL OR TRANSFER OF THE FRANCHISE WILL NOT APPLY TO ANY LIABILITY UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW.
THE FRANCHISE AGREEMENT SPECIFIES THE APPLICATION OF MICHIGAN LAWS AND MICHIGAN VENUE FOR LITIGATION; HOWEVER, YOU MAY BRING AN ACTION UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW IN ANY COURT OF COMPETENT JURISDICTION IN MARYLAND.
ANY CLAIM ARISING UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW MUST BE BROUGHT WITHIN THREE YEARS AFTER THE GRANT OF THE FRANCHISE.
MINNESOTA
Source: Item 23 — RECEIPTS (FDD pages 51–204)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, the effectiveness of specific addendum provisions is contingent upon state-specific laws and regulations. For instance, in Illinois, any provision that attempts to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is considered void. Similarly, statements or acknowledgments signed by a franchisee at the start of their franchise relationship cannot waive claims under state franchise law, including those related to fraud, or disclaim reliance on the franchisor. This Illinois provision supersedes any conflicting terms in other documents related to the franchise agreement.
In Indiana, the FDD indicates that the requirement for franchisees to purchase products from specific suppliers may be unlawful under Indiana law. If this requirement is found to be unlawful, it becomes void, and franchisees are then required to purchase products from approved suppliers. Additionally, Azal Coffee is restricted from establishing a company-owned outlet that is substantially identical to the franchise business within the franchisee's protected area. The post-termination non-competition covenant in Indiana only applies to the franchisee's protected area and does not extend to areas near other Azal Coffee franchise locations. The Franchise Agreement specifies that Michigan law governs the agreement's construction, except where Indiana Franchise Law applies.
In Virginia, the Azal Coffee FDD states that it is unlawful for a franchisor to cancel a franchise without reasonable cause, as defined by the Virginia Retail Franchising Act. If any termination grounds in the Franchise Agreement do not meet this definition of "reasonable cause" under Virginia law, that provision may not be enforceable. Additionally, it is unlawful for Azal Coffee to use undue influence to induce a franchisee to surrender any rights granted under the franchise. Any provision in the Franchise Agreement that involves such undue influence may also be deemed unenforceable.
In summary, the effectiveness and enforceability of addendum provisions for Azal Coffee franchisees are heavily dependent on the specific legal framework of the state in which the franchise operates. Franchisees should be aware of these state-specific stipulations, as they can significantly impact the terms and conditions of their franchise agreement.