Regarding suppliers and landlords, what obligations does an Ella Cafe franchisee have?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.19 Suppliers and Landlord. Franchisee shall pay all vendors and suppliers in a timely manner. If Franchisee leases the Location, Franchisee shall comply with its lease for the Location.
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- Use. Tenant is a franchisee of Franchisor. The Leased Premises shall be used only for the operation of an Ella Coffee House business (or any name authorized by Franchisor).
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- Notice of Default and Opportunity to Cure. Landlord shall provide Franchisor with copies of any written notice of default ("Default") given to Tenant under the Lease, and Landlord grants to Franchisor the option (but not the obligation) to cure any Default under the Lease (should Tenant fail to do so) within 10 days after the expiration of the period in which Tenant may cure the Default.
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- Termination of Lease. Landlord shall copy Franchisor on any notice of termination of the Lease. If Landlord terminates the Lease for Tenant's Default, Franchisor shall have the option to enter into a new Lease with Landlord on the same terms and conditions as the terminated Lease. To exercise this option, Franchisor must notify Landlord within 15 days after Franchisor receives notice of the termination of the Lease.
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- Termination of Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated during the term of the Lease for any reason, then upon the written request of Franchisor, Franchisor shall have the right (but not the obligation) to require Tenant to assign the Lease to Franchisor. Landlord hereby consents to the assignment of the Lease to Franchisor.
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- Authorization. Tenant authorizes Landlord and Franchisor to communicate directly with each other about Tenant and Tenant's business.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, franchisees have specific obligations to suppliers and landlords. Franchisees are required to pay all vendors and suppliers in a timely manner. This indicates that Ella Cafe expects franchisees to maintain good relationships with their suppliers by ensuring payments are made promptly.
If the franchisee leases the location for their Ella Cafe business, they must comply with all terms of the lease agreement. This includes adhering to the lease's stipulations regarding rent payments, property maintenance, and any other conditions outlined in the lease. Ella Cafe also has certain rights regarding the lease, including receiving copies of default notices and the option to cure any default under the lease if the franchisee fails to do so. Additionally, Ella Cafe has the option to enter into a new lease with the landlord on the same terms if the original lease is terminated due to the franchisee's default.
Furthermore, if the Franchise Agreement between Ella Cafe and the franchisee is terminated, Ella Cafe has the right to require the franchisee to assign the lease to them. The landlord consents to this potential assignment. The franchisee also authorizes the landlord and Ella Cafe to communicate directly with each other about the franchisee and their business. These provisions ensure that Ella Cafe has some control over the location of its franchises and can maintain its brand presence even if a franchisee's business fails.