If no location is stated when the Ella Cafe agreement is signed, how will the location be determined?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
he franchisee (if you are an Entity). "Transfer" as a noun means any such sale, assignment, gift, transfer, pledge, mortgage or encumbrance.
ARTICLE 2. GRANT OF LICENSE
- 2.1 Grant. Franchisor hereby grants Franchisee the right to develop and continuously operate a Coffee House at the Location identified in Attachment 2, to deliver authorized products to locations in accordance with the Standards (which may include distance or area restrictions), and to use the Marks in the operation and promotion of the Coffee House. If no Location is stated on when this Agreement is signed, then the parties will determine the Location in accordance with Section 6.1. Franchisee hereby undertakes the obligation and agrees to continually operate the Coffee House during the Term hereof and strictly according to the terms and conditions of this Agreement. This Agreement does not grant Franchise any right, among others: (a) to sublicense the use of the System or Marks; (b) to co-brand with another concept or brand; (c) to offer or sell products or services at or from any location other than the Franchised Location (such as from a cart, kiosk, or food truck); (d) to ship ELLA products, regardless of the destination; or (e) distribute ELLA products through other channels, such as supermarkets, convenience stores or other retailers, or other food service providers.
- 2.2 Designated Area. Upon Franchisee's acquisition of the Location for the Coffee House, Franchisor will amend Attachment 2 to include the Location and a description of the Designated Area surrounding the Location or will memorialize such information in another form of written communication, signed by Franchisor and Franchisee. As long as Franchisee is in full compliance with this Agreement and any other agreement between Franchisee and Franchisor or its Affiliates, then except as otherwise expressly provided in this Agreement (including Section 2.4. of this
Agreement), neither Franchisor nor any Affiliate of Franchisor will establish, or authorize any person or entity other than Franchisee to establish, a Coffee House that is the same model as the one operated by Franchisee under this Agreement in the Designated Area during the Term of this Agreement.
- 2.3. Retained Rights. The rights granted to Franchisee under this Agreement are nonexclusive, and Franchisor and its Affiliates have and retain all rights within and outside the Designated Area, except those expressly granted to Franchisee in the Agreement. Accordingly, Franchisor, its Affiliates, and any other authorized person or entity will have the right, among others, (a) to operate, and license others to operate, ELLA Coffee House at any location outside the Designated Area and in any Reserved Area (whether located inside or outside the Designated Area), including ELLA Coffee House that are adjacent to or surrounded by the Designated Area (b) to advertise and promote the System in the Designated Area (c) to operate, and license others to operate, ELLA Coffee House at any locations in any Reserved Area, including Reserved Areas that are in the Designated Area (d) to operate, and license others to operate, other coffee houses, ghost kitchens, or other food service businesses utilizing trademarks other than ELLA COFFEE HOUSE inside and outside the Designated Area and in any Reserved Area (whether located inside or outside the Designated Area and (e) to engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and sale of any and all food, beverages, or other services and products, under the Marks or under other names or marks through any method of distribution, other than a ELLA Coffee House, regardless of the competitive impact, and including, but not limited to, from vending machines and kiosks, food trucks, grocery stores, and other food retailers and through mail order catalogs and the Internet, regardless of the proximity to, or the competitive impact on, Coffee Houses developed by Franchisee. 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. Franchisee understands and acknowledges that, at any time, the Franchisor may develop or authorize someone other than Franchisee to develop and operate ELLA Coffee House in the Reserved Area within the Designated Area.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if the location is not specified when the franchise agreement is signed, the parties will determine the location as described in Section 6.1 of the agreement.
Section 6.1 outlines a process where the franchisee must identify a potential site for the Ella Cafe within a designated Site Selection Area and then submit a site approval request to Ella Cafe. If the franchisee has a multi-unit development agreement, the site must be within the Development Area specified in that agreement. Otherwise, the site must be within the non-exclusive Site Selection Area outlined in Attachment 2 of the franchise agreement. The selected site must meet Ella Cafe's current site selection criteria and be mutually acceptable to both the franchisee and Ella Cafe. The franchisee has no exclusive rights to the Site Selection Area, and it excludes any Reserved Area or existing/future Site Selection Areas of other Ella Cafe franchisees.
The franchisee has 180 days from the Effective Date of the agreement to get Ella Cafe's approval for a location within the Site Selection Area. The franchisee needs to submit the proposed location with all related information, including the lease and lease rider (Attachment 5), for Ella Cafe's acceptance. Ella Cafe has 30 days to either accept or reject the proposed location in writing; failure to respond in writing within 30 days is considered a rejection. Upon Ella Cafe's approval of the location, Attachment 2 will be updated to define the Designated Area around the location, and the franchisee loses any rights to the initial Site Selection Area.