Must an Ella Cafe franchisee have the lease approved by the franchisor?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.3 Lease. In connection with any lease between Franchisee and the landlord of the Location: when the Franchisor accepts the Location, it shall issue a Location Acceptance Letter in the form of Attachment 2 which states the Location and Designated Area.
Unless otherwise specified in the Attachment 2, the Designated Area shall be 2-mile radius which is a circle having the Coffee House's front entrance as its center point.
If Franchisee occupies the Coffee House premises under a lease, Franchisor has the right to approve the lease terms, and Franchisee must not sign the lease until Franchisor has approved its terms.
Franchisor's approval of a lease does not mean that the economic terms of the lease are favorable; it means only that the lease contains the lease terms that Franchisor requires.
The lease also must contain the terms reflected in the Lease Rider, Attachment 7 hereto.
Franchisee must deliver to Franchisor a fully-executed copy of the lease or contract for sale within 10 days after its execution.
6.4 Coffee House Design and Build-Out.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a franchisee occupies the Coffee House premises under a lease, Ella Cafe has the right to approve the lease terms, and the franchisee must not sign the lease until Ella Cafe has approved its terms. This approval from Ella Cafe does not guarantee favorable economic terms; it only confirms that the lease includes the terms Ella Cafe requires.
Furthermore, the lease must contain the terms reflected in the Lease Rider, Attachment 7 of the Franchise Disclosure Document. The franchisee is obligated to deliver a fully-executed copy of the lease or contract for sale to Ella Cafe within 10 days after its execution.
This requirement ensures that the lease agreement aligns with Ella Cafe's standards and protects their interests. Prospective franchisees should carefully review Attachment 7 and understand all required lease terms before finalizing any agreements with landlords. Franchisees should also be aware that any construction delays resulting from disputes with landlords are not the responsibility of Ella Cafe.