Is the franchisee required to follow Ella Cafe's procedures for Coffee House construction and build-out?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
of the Coffee House, which vendor is not on Franchisor's approved vendor list for
such services, then Franchisor reserves the right to charge Franchisee for its time and the costs Franchisor incurs to approve and/or train such vendor, which fee is not refundable. Franchisee must construct and build out the Coffee House according to Franchisor's Standards and specifications for design, decor, and layout and must equip the Coffee House according to Franchisor's requirements for fixtures, furnishings, equipment, interior and exterior signage, decor, trade dress, and awnings, which Franchisor will provide to Franchisee. Franchisor will provide such advice regarding construction and build-out as it deems appropriate, but Franchisee is solely responsible for sourcing, hiring, and paying for the professional services needed to complete Franchisee's Coffee House design and build-out obligations. Franchisee is solely responsible for obtaining all government approvals, zoning classifications, permits, licenses, and clearances relating to the Coffee House and for complying with applicable requirements of the Americans with Disabilities Act.
- (ii) During construction, Franchisee must maintain general liability and property damage insurance of the type and with the limits Franchisor requires, protecting Franchisee and Franchisor and its Affiliates and their respective partners, shareholders, directors, agents, and employees. Such policy or policies must be written by a responsible insurer or insurers acceptable to Franchisor and must contain a waiver of subrogation in favor of Franchisor and its Affiliates, and their respective partners, shareholders, directors, agents, and employees. Franchisee must notify Franchisor in writing when construction begins and thereafter must provide progress reports when, and in the form, required by Franchisor.
- (iii) During construction, Franchisee must provide Franchisor with such periodic progress reports as Franchisor may reasonably request, including, but not limited to, digital photographs and/or video of the Coffee House premises and the surrounding area. In addition, Franchisor may make such on-site inspections as it may deem reasonably necessary to evaluate such progress, which visits may be through remote/virtual means. Franchisee will notify Franchisor of the scheduled date for completion of construction no later than 21 days prior to such date.
- 6.5. Relocation. Franchisee will not relocate the Coffee House without Franchisor's express prior written consent. If Franchisee is unable to continue the operation of the Coffee House at the Location because of the occurrence of an event of Force Majeure (or for other reasons not constituting an event of default under this Agreement), Franchisee may request Franchisor's consent to relocate the Coffee House to another location in the Designated Area. Franchisor's approval may not be unreasonably withheld but may be conditioned upon the payment of an agreed minimum fee to Franchisor during the period in which the Coffee House is not in operation. Selection of the relocation site and Coffee House construction, renovation, and opening procedures and timelines will be governed by this Article 6.
- 6.6 New Franchisee Training. Franchisee's Principal Executive must complete Franchisor' training program for new franchisees to Franchisor' satisfaction at least four weeks before opening the Business.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, franchisees must adhere to Ella Cafe's standards and specifications for the design, decor, and layout of their coffee house. This includes equipping the coffee house according to Ella Cafe's requirements for fixtures, furnishings, equipment, interior and exterior signage, decor, trade dress, and awnings. Ella Cafe will provide advice on construction and build-out, but the franchisee is responsible for sourcing, hiring, and paying for the professional services needed to complete the build-out. The franchisee is also responsible for obtaining all government approvals, zoning classifications, permits, licenses, and clearances, as well as complying with the Americans with Disabilities Act.
Ella Cafe may provide standard building plans, specifications, recommended floor plans, and required decor. Franchisees must follow Ella Cafe's procedures for construction and build-out, which may include engaging an architect, design consultant, or general contractor specified by Ella Cafe. If a franchisee wants to use a vendor not on Ella Cafe's approved list, Ella Cafe reserves the right to charge a fee for the time and costs incurred to approve or train the vendor. This fee is non-refundable.
During construction, franchisees must maintain general liability and property damage insurance, protecting both the franchisee and Ella Cafe. Franchisees must notify Ella Cafe in writing when construction begins and provide progress reports as required. Ella Cafe may also conduct on-site inspections, including remote or virtual visits, to evaluate progress. Franchisees must notify Ella Cafe of the scheduled completion date at least 21 days prior to completion. Once the site is approved, Ella Cafe is not responsible for construction delays due to change orders, force majeure events, disputes with vendors, or any other reason during the build-out.