What constitutes a default related to payments to Azal Coffee, its affiliates, or third-party suppliers?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (f) Throughout the term of this Agreement you have satisfied all material reporting requirements and all monetary obligations to us and our affiliates, suppliers, vendors, and creditors (excepting reasonable disputes that you are attempting in good faith to resolve) within the amount of time specified for satisfaction or cure of default with respect to the obligation.
4.13 Manner and Timing of Payment.
Your payments to us for royalty, local advertising fees, marketing fund contributions, mobile application and technology fees, training, renewal and transfer fees, management fees, mystery shopper fees, relocation fees, litigation expenses, late charges and interest, amounts owed for products or services provided by us or our affiliates, amounts owed for maintenance expenses we incur under Section 8.8, amounts owed for management fees, amounts owed for liquidated damage amounts, and all other amounts you owe to us or our affiliates must be made by electronic or similar funds transfer in the appropriate amounts from your bank account to our accounts, and at the places or in the manner we may specify. You must make payments at the times specified in this Agreement or as we may otherwise specify. You agree that we may specify payment by electronic fund transfers that we initiate. You must sign and deliver to your bank and to us the documents necessary to authorize and effectuate fund transfers as specified by us. You agree not to terminate the authorization as long as this Agreement is in effect. You agree not to close your bank account without providing us prior written notice and establishing a substitute bank account for the transfers. You also agree to make all required payments to us daily or weekly or at some other interval, instead of monthly or as otherwise provided in this Agreement, if we specify. You acknowledge that we may require you to make required payments at different intervals than other Azal Coffee franchisees.
4.14 No Setoff; Application of Payments.
Your obligations for the full and timely payment of the fees described in this Agreement and all other amounts owed to us are absolute and unconditional. You must not delay or withhold payment to us of all or part of those amounts based on our alleged nonperformance or for any other reason or put the fees or other amounts in escrow or setoff against any claims you may allege against us. We may apply any of your payments first to any accrued late charges or interest and then to any delinquent fees or other amounts outstanding before crediting the payment in the manner specified by you or to the current amount due.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, a franchisee can be considered in default if they fail to meet their monetary obligations to Azal Coffee, its affiliates, suppliers, vendors, and creditors. However, the franchisee will not be considered in default if there are reasonable disputes that they are attempting to resolve in good faith. The franchisee must satisfy all monetary obligations within the time specified for satisfaction or cure of default with respect to the obligation.
Specifically, the franchisee's payments to Azal Coffee for royalties, local advertising fees, marketing fund contributions, mobile application and technology fees, training, renewal and transfer fees, management fees, mystery shopper fees, relocation fees, litigation expenses, late charges and interest, amounts owed for products or services provided by Azal Coffee or its affiliates, amounts owed for maintenance expenses, amounts owed for management fees, amounts owed for liquidated damage amounts, and all other amounts owed to Azal Coffee or its affiliates must be made by electronic or similar funds transfer in the appropriate amounts from the franchisee's bank account to Azal Coffee's accounts, and at the places or in the manner Azal Coffee may specify. Franchisees must make payments at the times specified in the Franchise Agreement or as Azal Coffee may otherwise specify.
Azal Coffee may specify payment by electronic fund transfers that they initiate, and the franchisee must sign and deliver to their bank and to Azal Coffee the documents necessary to authorize and effectuate fund transfers as specified by Azal Coffee. The franchisee agrees not to terminate the authorization as long as the Franchise Agreement is in effect and not to close their bank account without providing Azal Coffee prior written notice and establishing a substitute bank account for the transfers. Azal Coffee may also require franchisees to make required payments daily, weekly, or at some other interval, instead of monthly or as otherwise provided in the Franchise Agreement, and acknowledges that Azal Coffee may require franchisees to make required payments at different intervals than other Azal Coffee franchisees.
The franchisee's obligations for the full and timely payment of the fees described in the Franchise Agreement and all other amounts owed to Azal Coffee are absolute and unconditional. Franchisees must not delay or withhold payment to Azal Coffee of all or part of those amounts based on Azal Coffee's alleged nonperformance or for any other reason or put the fees or other amounts in escrow or setoff against any claims they may allege against Azal Coffee. Azal Coffee may apply any of the franchisee's payments first to any accrued late charges or interest and then to any delinquent fees or other amounts outstanding before crediting the payment in the manner specified by the franchisee or to the current amount due.