What modifications or alterations must an Ella Cafe franchisee make to the Coffee House upon termination or expiration to prevent association with the Ella Cafe system?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
t, copy or colorable imitation of the Marks, either in connection with such other business or the promotion thereof, that is likely to cause confusion, mistake or deception, or that is likely to dilute Franchisor's rights in the Marks. Franchisee shall not utilize any designation of origin, description or representation that falsely suggests or represents an association or connection with Franchisor. This Section 14 is not intended as an approval of Franchisee's right to operate other businesses and in no way is it intended to contradict other sections of this Agreement. Franchisee shall make such modifications or alterations to the Coffee House (including changing telephone numbers) immediately upon termination or expiration of this Agreement as may be necessary to prevent any association between Franchisor or the System and any business subsequently operated by Franchisee or others at the Coffee House. Franchisee shall make such specific additional changes to the Coffee House as Franchisor may reasonably request for that purpose including, without limitation, removal of all physical and structural features identifying or distinctive to the System. If Franchisee fails or refuses to comply with the requirements of this Section 14, Franchisor has the right to enter upon the Coffee House for the purpose of making or causing to be made such changes as may be required, at the expense of Franchisee, which expense Franchisee shall pay upon demand.
- 14.12 Liquidated Damages. If Franchisor terminates this Agreement based upon Franchisee's default (or if Franchisee purports to terminate this Agreement except as permitted under Section 14.8), then within 10 days thereafter Franchisee shall pay to Franchisor a lump sum (as liquidated damages and not as a penalty) calculated as follows: (a) the average Royalty Fees and Brand Marketing Fee Contributions that Franchisee owed to Franchisor under this Agreement for the 52 week period preceding the effective date of termination; multiplied by (y) the lesser of (1) two years or (2) the number of weeks remaining in the then-current term of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee is required to modify or alter the Coffee House to prevent any association between Ella Cafe and any subsequent business operating at the location. This includes changing telephone numbers and removing all physical and structural features that are identifying or distinctive to the Ella Cafe system.
Specifically, the franchisee must "de-identify" the location within 30 days after termination or expiration, ensuring that it no longer contains Ella Cafe's marks, signage, or trade dress, to the reasonable satisfaction of Ella Cafe. The franchisee must also comply with any reasonable instructions and procedures provided by Ella Cafe for de-identification. Additionally, the franchisee is obligated to notify telephone, internet, email, electronic network, directory, and listing entities about the termination or expiration of their right to use any numbers, addresses, domain names, locators, directories, and listings associated with Ella Cafe's marks. They must also authorize the transfer of these assets to Ella Cafe or a new franchisee as directed by Ella Cafe.
If the franchisee fails to comply with these requirements, Ella Cafe has the right to enter the Coffee House and make the necessary changes at the franchisee's expense, which the franchisee must pay upon demand. Furthermore, the franchisee must cease doing business under any of Ella Cafe's marks immediately upon termination or expiration of the agreement. These measures are in place to protect Ella Cafe's brand identity and prevent consumer confusion after a franchise agreement ends.