Does the Azal Coffee franchise agreement specify a relocation fee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the franchise agreement does mention relocation fees. Specifically, the agreement states that payments to Azal Coffee for relocation fees must be made via electronic or similar funds transfer. This indicates that relocation fees are a potential cost franchisees may incur under certain circumstances.
The FDD also outlines the manner and timing of payments, specifying that all payments, including relocation fees, must be made by electronic or similar funds transfer from the franchisee's bank account to Azal Coffee's accounts. The franchisee must authorize these fund transfers and agrees not to terminate the authorization or close the bank account without prior written notice. Azal Coffee retains the right to specify the payment intervals, which may differ among franchisees.
This requirement ensures that Azal Coffee has a consistent and reliable method for collecting various fees, including relocation fees. For a prospective franchisee, this means being prepared to handle payments electronically and understanding that the timing and frequency of these payments can be adjusted by Azal Coffee. It is important to clarify the specific conditions under which a relocation fee might be charged and the estimated amount to budget for such a scenario.
While the FDD mentions the possibility of relocation fees, it does not specify the exact amount or the circumstances that would trigger such a fee. A prospective franchisee should inquire with Azal Coffee about the specific details regarding relocation fees, including when they are applicable and how they are calculated. Understanding these details is crucial for accurate financial planning and assessing the overall investment required to operate an Azal Coffee franchise.