What fees are franchisees required to pay to Azal Coffee, as outlined in the franchise agreement?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
h break-out session time slot, and the dinner/awards banquet.
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.
4.15 Payment of Other Amounts Owed by You or Your Affiliates.
You must pay us and our affiliates all additional amounts owed by you or any of your affiliates on a timely basis. This includes, but is not limited to, amounts owed for goods and services provided by us or our affiliates, amounts owed to any advertising cooperatives, amounts you owe to third-parties that we elect to collect from you and remit on your behalf, or other miscellaneous amounts owed to us, our Affiliates, or to third-parties. Those amounts must be paid by the due dates specified
in this Agreement or other applicable agreement or as otherwise specified by us. Payments not paid when due will be subject to late charges and interest in the amounts specified in this Agreement or as otherwise specified in an invoice. You understand that under this Section we may charge you and may transfer payments from your bank accounts (as provided in Section 4.13) for amounts you or your affiliates may owe to third parties, us or our affiliates, or any applicable advertising cooperatives (including but not limited to amounts your affiliates may owe for royalty, advertising, technology, advertising cooperatives, or other obligations under other franchise or other agreements between your affiliates and us or our affiliates). We will only charge you for amounts owed by your affiliates if those amounts are not timely paid by your affiliates.
4.16 Security Interest.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees are subject to various fees throughout the term of the franchise agreement. These include royalty fees, local advertising fees, marketing fund contributions, mobile application and technology fees, training fees, renewal and transfer fees, management fees, mystery shopper fees, relocation fees, and litigation expenses. Additionally, franchisees may owe amounts for products or services provided by Azal Coffee or its affiliates, maintenance expenses incurred by Azal Coffee, liquidated damage amounts, and late charges and interest on overdue amounts.
Azal Coffee specifies that payments for these fees must be made via electronic or similar funds transfer from the franchisee's bank account, at the times and in the manner specified in the agreement or otherwise indicated by Azal Coffee. The company may require payments daily, weekly, or at other intervals, even if the agreement initially specifies monthly or other payment schedules. Franchisees must authorize these fund transfers and agree not to terminate the authorization or close the bank account without prior written notice to Azal Coffee and establishing a substitute account.
The Franchise Agreement also states that the franchisee's obligation to pay these fees is absolute and unconditional, meaning that franchisees cannot delay or withhold payments based on alleged nonperformance by Azal Coffee or for any other reason. Azal Coffee has the right to apply payments first to any accrued late charges or interest and then to any delinquent fees before crediting the payment to the current amount due. Furthermore, franchisees may be required to pay a portion of the cost of a vendor hired by Azal Coffee to advise on PCI Requirements and Information Security Standards, as well as a portion of the cost of a cyber insurance policy acquired by Azal Coffee for the franchise system.
Franchisees may also incur costs for additional training, sales programs, and meetings specified by Azal Coffee, including fees for the training itself, as well as wages, travel, food, and lodging expenses for their employees attending these programs. Failure to attend required additional training may result in liquidated damages. Additionally, franchisees are responsible for the costs associated with using and maintaining any required Franchise Technology, including license fees, service fees, management fees, and costs for support, maintenance, updates, and upgrades. These fees and payment terms are subject to change at Azal Coffee's discretion.