Under what conditions will Azal Coffee charge an Azal Coffee franchisee for amounts owed by the franchisee's affiliates?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
our Store opens for business unless sooner terminated as provided in this Agreement.
3.2 Option.
You will have the option to remain an Azal Coffee franchisee for two (2) additional periods of five (5) years if, at the beginning of the option period, all of the following conditions are fulfilled:
- (a) You are not in default under this Agreement or any other agreement with us or our affiliates and no affiliate of yours is in default under any agreement with us or our affiliates.
- (b) Within the last thirty-six (36) months we have not sent you two (2) or more notices of default of the terms of this Agreement or of any of our specifications, standards, or operating procedures (whether or not the notices related to the same or different violations and whether or not you have remedied those violations).
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee franchisees can be held responsible for amounts owed by their affiliates under specific circumstances. Specifically, if a franchisee or their affiliate is in default under any agreement with Azal Coffee or its affiliates, this can impact the franchisee's ability to renew their franchise agreement.
To be eligible for a renewal option for two additional five-year periods, the franchisee and their affiliates must not be in default under any agreement with Azal Coffee or its affiliates at the beginning of the option period. Additionally, throughout the term of the agreement, the franchisee must have satisfied all material reporting requirements and monetary obligations to Azal Coffee and its affiliates, suppliers, vendors, and creditors within the specified time for satisfaction or cure of default. The only exception to this is reasonable disputes that the franchisee is attempting to resolve in good faith.
This means that if an affiliate of the Azal Coffee franchisee fails to meet its financial obligations to Azal Coffee or its related entities, it could prevent the franchisee from renewing their franchise agreement. This interdependency highlights the importance of ensuring that all related business entities maintain good financial standing with Azal Coffee to avoid jeopardizing the franchisee's future with the brand.