How many additional terms can an Ella Cafe franchisee obtain after the initial term?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.1 Term. Unless sooner terminated as provided in this Agreement, the term of this Agreement ("Term") will begin on the Effective Date and will continue for the period of 10 years.
- 3.2 Successor Agreement. Subject to the conditions below, Franchisee has the right to obtain a successor franchise at the expiration of the Term of this Agreement by entering into Franchisor's then-current franchise agreement with Franchisor. Franchisee's right to a successor franchise is
limited to two additional terms of five (5) years. Your failure to exercise the first renewal right, will serve as a waiver of all other renewal rights. To qualify for a successor franchise, each of the following pre-conditions shall have been fulfilled and remain true as of the last day of the Term of this Agreement:
- i.
Franchisee has, during the entire term of this Agreement, substantially complied with all provisions of this Agreement;
- ii.
Franchisee has updated, remodeled, and refurbished the Coffee House, signage, and equipment, to reflect Franchisor's then-current standards and specifications applicable to new franchisees;
- iii.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, an Ella Cafe franchisee can obtain up to two additional terms after the initial term. The initial franchise agreement lasts for 10 years. If the franchisee meets certain conditions, they have the right to enter into Ella Cafe's then-current franchise agreement for a successor franchise.
Each additional term is for a period of five years. However, if a franchisee fails to exercise their first renewal right, they waive all other renewal rights. This means that franchisees must actively pursue their first renewal to remain eligible for any subsequent renewals.
To qualify for a successor franchise, the franchisee must substantially comply with all provisions of the existing agreement during its entire term. They must also update, remodel, and refurbish the Coffee House, signage, and equipment to meet Ella Cafe's current standards for new franchisees.