Can Azal Coffee charge an administrative fee for administering gift card programs?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must participate in all gift cards, electronic gift or money cards (E-cards), frequency cards, awards or loyalty programs, or other programs specified by us and you must honor all cards, awards, and other programs issued by us or by other franchisees in accordance with our policies. You acknowledge and agree that your participation in those programs is integral to the Franchise Systems and to the success of those programs. We or a person designated by us will administer all gift and E-card or other programs specified by us. We retain the right to retain and use for our benefit any breakage from gift cards. We may charge an administrative fee for administrating those programs. We will have the right to charge you liquidated damages under Section 15.7 for each week that you fail to participate in any of these programs specified by us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees must participate in all gift card, electronic gift or money cards (E-cards), frequency cards, awards or loyalty programs, or other programs specified by Azal Coffee and must honor all cards, awards, and other programs issued by Azal Coffee or by other franchisees in accordance with their policies. Azal Coffee or a person designated by them will administer all gift and E-card or other programs specified by them.
Azal Coffee retains the right to retain and use for their benefit any breakage from gift cards. Breakage refers to the value of gift cards that are never redeemed. More importantly, Azal Coffee may charge an administrative fee for administering those programs.
Failure to participate in these programs can result in liquidated damages under Section 15.7 for each week of non-compliance. This underscores the importance of adhering to Azal Coffee's policies regarding gift card and loyalty programs, as non-compliance can lead to financial penalties for the franchisee.