What constitutes an 'Affiliate' of a named person in the context of the Ella Cafe franchise agreement?

According to Ella Cafe's 2024 Franchise Disclosure Document, an 'Affiliate' of a named person is defined as any person or entity that is controlled by, controlling, or under common control with that named person. This definition is important for prospective franchisees to understand, as it clarifies the scope of various obligations and restrictions within the franchise agreement.

For example, the Development Agreement states that the developer must be in full compliance with the agreement and any other agreement between the developer and/or its affiliates and Ella Cafe and/or its affiliates. This means that any entity considered an affiliate of the developer is also bound by the terms of the agreement, and non-compliance by an affiliate could impact the franchisee's standing with Ella Cafe.

Furthermore, Ella Cafe retains specific rights, and these rights extend to its affiliates. This means Ella Cafe and its affiliates can operate or license others to operate coffee houses that are different models than the one operated by the franchisee, regardless of the impact on the franchisee's business. Understanding the definition of 'Affiliate' helps franchisees recognize the full extent of Ella Cafe's rights and potential competitive activities.