What attachment must be included in the lease for an Ella Cafe franchise?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Use. Tenant is a franchisee of Franchisor. The Leased Premises shall be used only for the operation of an Ella Coffee House business (or any name authorized by Franchisor).
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- Notice of Default and Opportunity to Cure. Landlord shall provide Franchisor with copies of any written notice of default ("Default") given to Tenant under the Lease, and Landlord grants to Franchisor the option (but not the obligation) to cure any Default under the Lease (should Tenant fail to do so) within 10 days after the expiration of the period in which Tenant may cure the Default.
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- Termination of Lease. Landlord shall copy Franchisor on any notice of termination of the Lease. If Landlord terminates the Lease for Tenant's Default, Franchisor shall have the option to enter into a new Lease with Landlord on the same terms and conditions as the terminated Lease. To exercise this option, Franchisor must notify Landlord within 15 days after Franchisor receives notice of the termination of the Lease.
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- Termination of Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated during the term of the Lease for any reason, then upon the written request of Franchisor, Franchisor shall have the right (but not the obligation) to require Tenant to assign the Lease to Franchisor. Landlord hereby consents to the assignment of the Lease to Franchisor.
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- Assignment and Subletting. Notwithstanding any provision of the Lease to the contrary, Tenant shall have the right to assign or sublet the Lease to Franchisor, provided that no such assignment or sublease shall relieve Tenant or any guarantor of liability under the Lease. If Franchisor becomes the lessee of the Leased Premises, then Franchisor shall have the right to assign or sublease its lease to a franchisee of the ELLA brand. Any provision of the Lease which limits Tenant's right to own or operate other ELLA Coffee House Coffee Houses in proximity to the Leased Premises shall not apply to Franchisor.
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- Authorization. Tenant authorizes Landlord and Franchisor to communicate directly with each other about Tenant and Tenant's business.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, while there is information regarding the lease agreement, there is no mention of a specific attachment that must be included in the lease for an Ella Cafe franchise. However, the FDD does outline several key provisions that must be part of the lease agreement between the franchisee (as tenant) and the landlord. These provisions primarily protect Ella Cafe's interests as the franchisor.
Specifically, the lease must include clauses that require the landlord to notify Ella Cafe of any default notices sent to the franchisee and grant Ella Cafe the option to cure the default within 10 days after the franchisee's cure period expires. The landlord must also copy Ella Cafe on any lease termination notices. If the lease is terminated due to the franchisee's default, Ella Cafe has the option to enter into a new lease with the landlord under the same terms as the original lease, provided they notify the landlord within 15 days of receiving the termination notice.
Furthermore, if the Franchise Agreement between Ella Cafe and the franchisee is terminated, Ella Cafe has the right to require the franchisee to assign the lease to them, and the landlord must consent to this assignment. The franchisee also has the right to assign or sublet the lease to Ella Cafe without relieving the franchisee of liability. If Ella Cafe becomes the lessee, they can assign or sublease the lease to another Ella Cafe franchisee. Any lease provisions limiting the franchisee's ability to operate other Ella Cafe locations nearby do not apply to Ella Cafe itself. Finally, the franchisee authorizes the landlord and Ella Cafe to communicate directly about the franchisee's business.
Prospective Ella Cafe franchisees should carefully review these lease requirements with their legal counsel to fully understand their obligations and the franchisor's rights related to the leased premises. It would be prudent to ask Ella Cafe's franchisor directly about any required lease attachments or specific lease addenda that they require to ensure full compliance.