Is the Azal Coffee franchisee required to pay an initial franchise fee upon renewal?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You will have the option to remain an Azal Coffee franchisee for two (2) additional periods of five (5) years if, at the beginning of the option period, all of the following conditions are fulfilled:
- (a) You are not in default under this Agreement or any other agreement with us or our affiliates and no affiliate of yours is in default under any agreement with us or our affiliates.
- (b) Within the last thirty-six (36) months we have not sent you two (2) or more notices of default of the terms of this Agreement or of any of our specifications, standards, or operating procedures (whether or not the notices related to the same or different violations and whether or not you have remedied those violations).
- (c) You provide written notice of your intent to continue as a franchisee not more than twelve (12) months and not less than six (6) months before the beginning of the option period.
- (d) You are able to maintain possession of the Franchise Location or you have been able to secure and develop, in compliance with our then applicable standards used in the granting of a franchise, suitable alternative premises within your Protected Area for your Store. Any alternative premises must be acceptable to and approved in advance by us.
- (e) You agree to take any action specified by us to make the Franchise Business comply with current appearance, Franchise Trade Dress, equipment, fixture, and signage requirements. You acknowledge that we may not uniformly impose refurbishing obligations on renewal of our franchises based on numerous factors and that we may require you to take steps to refurbish the Franchise Location that we have not required of other franchisees.
- (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.
- (g) You have satisfied any current training requirements for new or existing franchisees.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees have the option to renew their franchise agreement for two additional five-year periods, provided certain conditions are met. These conditions include not being in default, providing timely written notice of intent to renew, maintaining possession of the franchise location or securing an approved alternative, complying with current appearance and equipment standards, satisfying all reporting and monetary obligations, and meeting current training requirements.
While the conditions for renewal are outlined, the document does not explicitly state whether a franchisee must pay an initial franchise fee upon renewal. However, Item 22 does mention that payments to Azal Coffee include "renewal and transfer fees".
Prospective Azal Coffee franchisees should clarify with the franchisor whether a renewal fee is required, and if so, the amount and payment terms. Understanding all costs associated with renewing the franchise is crucial for long-term financial planning.