Is the Azal Coffee franchisee required to pay a renewal 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, franchisees may be required to pay a renewal fee. Section 4.13 mentions 'renewal fees' as one of the payments franchisees may owe to Azal Coffee. This fee, along with other fees like royalty, local advertising, marketing fund contributions, mobile application and technology fees, training, transfer fees, and others, must be paid via electronic funds transfer from the franchisee's bank account.
The document specifies that Azal Coffee has the right to specify the manner and timing of these payments, potentially requiring payments daily, weekly, or at other intervals instead of monthly, and that these payment schedules may differ from other Azal Coffee franchisees. This means that the renewal fee, if applicable, will be subject to these electronic transfer requirements and payment schedule adjustments.
Prospective franchisees should note that the obligation to pay these fees, including renewal fees, is absolute and unconditional. Franchisees cannot delay or withhold payments based on alleged nonperformance by Azal Coffee or any other reason. Furthermore, Azal Coffee can apply payments first to any accrued late charges or interest before crediting the payment to the current amount due. Therefore, it is crucial for potential franchisees to understand the specific renewal fee amount and payment terms during the renewal process to avoid any penalties or disputes.