Is the call right granted to Ella Cafe revocable?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchisor shall operate or license others to operate a Ghost Kitchen inside of the Designated Area or Reserved Area with Franchisee's prior written consent; however, if such a Ghost Kitchen exists in the Designated Area or Reserved Area at the time of execution of this Agreement, then Franchisee's consent is deemed to have been provided and cannot be revoked.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
Based on the 2024 Ella Cafe Franchise Disclosure Document, the franchisee's consent for the franchisor to operate or license a Ghost Kitchen within the Designated Area or Reserved Area is deemed granted and cannot be revoked if such a Ghost Kitchen exists at the time the franchise agreement is executed. This means that if an Ella Cafe Ghost Kitchen is already operating in the franchisee's designated or reserved area when they sign the agreement, the franchisee cannot later withdraw their consent for its operation.
However, if a Ghost Kitchen is not present at the time of signing, the franchisor must obtain the franchisee's prior written consent to operate or license a Ghost Kitchen in the Designated Area or Reserved Area. The FDD does not specify whether this written consent, once given, can be revoked by the franchisee.
Therefore, a prospective Ella Cafe franchisee should seek clarification from the franchisor regarding the revocability of their written consent for future Ghost Kitchens. Understanding the conditions under which the franchisor can establish competing Ghost Kitchens is crucial for assessing the potential impact on the franchisee's business and profitability.