Does the Ella Cafe Franchise Agreement require a warranty that the franchisee is not on any US government restricted parties list?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Developer hereby warrants and represents that neither it nor any of its Owners, officers, directors, managers, partners, agents, or employees, or their respective interests therein is now (nor will be during the Term of this Agreement) identified, either by name or an alias, pseudonym, or nickname, on any of the lists of restricted or denied parties maintained by the United States government, including:
- (a) "Denied Persons List" maintained by the U.S.
Commerce Department's Bureau of Industry and Security (http://www.bis.doc.gov/dpl/Default.shtml);
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the Franchise Agreement includes a warranty concerning restricted parties lists. Specifically, the franchisee ('Developer') must warrant that neither they nor any of their owners, officers, directors, managers, partners, agents, or employees are identified on any restricted or denied parties lists maintained by the U.S. government, including the "Denied Persons List" maintained by the U.S. Commerce Department's Bureau of Industry and Security. This warranty extends throughout the term of the agreement.
This requirement means that a prospective Ella Cafe franchisee must ensure that they and all related parties are not on any U.S. government restricted parties lists before entering into the agreement and must remain off these lists during the entire term of the agreement. Failure to comply with this warranty could result in a breach of the Franchise Agreement, potentially leading to termination and other legal consequences.
Franchisors often include such clauses to ensure compliance with U.S. laws and regulations, particularly those related to international trade and security. By including this warranty, Ella Cafe aims to protect its brand and business interests from potential legal and reputational risks associated with doing business with restricted parties. This is a fairly standard practice in franchising, especially for businesses with international operations or supply chains.