How will Azal Coffee collect the Data Security Consultant and Cyber Insurance Costs fee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit and | Cost of audit or | On receipt of our | This cost must be paid if |
| Inspection Expenses | inspection plus employee expenses | billing | the audit is necessary because of your failure to furnish reports or financial information, or the audit discloses an understatement of 2% or more of Gross Sales. |
| Product and Supplier Approval Fee | Up to $3,000 | Before approval of a product or supplier | You may be required to pay this fee if you request that we approve a product or supplier. |
| Data Security Consultant and Cyber Insurance Costs | Cost of engaging vendor or of cyber insurance policy | Periodically by EFT that we initiate | We may require you to pay for a consultant on data security and/or for a cyber insurance policy. We don't currently impose these requirements but reserve the right to do so in the future. |
| Indemnification | Amount will vary under circumstances | As incurred | You must reimburse us if we incur liability from the operation of your franchise. |
| Liquidated Damages for Failure to Comply with Obligations | $100 to $2,500 depending on the violation | On the date specified by us | We have the right to charge liquidated damages if you fail to comply with certain obligations under the Franchise Agreement. |
| Deadline Extension Fee | $5,000 | At the time you request an extension | You may obtain a three month extension of the time to obtain a location if you timely notify us and pay a non refundable extension fee. |
| Liquidated Damages For Loss of Bargain Under Franchise Agreement | See Note (7) | On demand | Payable as part of the damages due to us if you breach the Franchise Agreement and the Franchise Agreement |
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the Data Security Consultant and Cyber Insurance Costs will be collected periodically via Electronic Funds Transfer (EFT) initiated by Azal Coffee. This fee covers the cost of engaging a data security consultant or obtaining a cyber insurance policy, should Azal Coffee decide to implement these requirements in the future. Currently, Azal Coffee does not impose these requirements but retains the right to do so.
For a prospective Azal Coffee franchisee, this means that while there is no immediate obligation to pay this fee, it is essential to be aware that it could be implemented during the franchise term. The amount will depend on the cost of the consultant or insurance policy. The franchisee should budget for this potential expense and understand that payment will be collected through electronic funds transfer.
It is important for potential franchisees to clarify with Azal Coffee the specific circumstances under which this fee would be implemented, the estimated cost, and the frequency of payments. Understanding these details will help in accurately forecasting expenses and managing the franchise's financial obligations. While many franchise agreements include provisions for unforeseen costs, the periodic nature and mandatory EFT payment method for this particular fee warrant careful consideration.