If an Azal Coffee franchisee's payment is not paid when due, what penalties will be applied?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
t 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.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, if a franchisee fails to make payments on time, Azal Coffee has the right to apply any 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.
Azal Coffee emphasizes that the franchisee's obligation to make full and timely payments is absolute and unconditional. Franchisees are not allowed to delay or withhold payments due to alleged nonperformance by Azal Coffee or for any other reason. They also cannot put the fees in escrow or set them off against any claims they may have against Azal Coffee.
Furthermore, Azal Coffee retains a lien against the furnishings, fixtures, equipment, and all other assets of the Franchise Business, including the franchisee's interest in the Lease and the Location, until all payments, damages, costs, and expenses are fully paid. This provides Azal Coffee with a security interest in the franchisee's business assets to ensure all financial obligations are met.