Is the initial franchise fee for Azal Coffee earned at the time of payment?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
INITIAL FEES**
You must pay an initial franchise fee of $25,000 for an Azal Coffee franchise. The initial franchise fee is payable in full at the time you sign the Franchise Agreement.
All initial franchise fees are earned at the time of payment and are not refundable under any circumstances. Initial franchise fees are uniform. It is our intent to charge all new franchisees the same initial franchise fee.
You must also pay our affiliate, Wholesale $70,000 to $80,000 for your initial supply of coffee beans, tea, coffee and tea mixes, equipment, paper products, syrups, sauces, milk, cups, mugs, branded products, coffee supplies, bakery goods, uniforms, and other inventory items. This range also includes the estimated cost to ship the goods to your Franchise Location. You must pay this fee before you open and immediately upon invoice. This payment is not refundable.
As part of our lease approval process, we may have an attorney review the proposed lease to ensure that the proposed lease meets our requirements. We will have a right to charge you a non-refundable fee up to $1,500 to cover the cost of that review. You must pay this fee within 7 days of demand. This payment is n
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the initial franchise fee of $25,000 is earned by the franchisor at the time of payment. This fee is due when the franchisee signs the Franchise Agreement.
This means that once the franchisee pays the initial franchise fee to Azal Coffee, the franchisor is not obligated to refund it under any circumstances. This is a standard practice in franchising, as the fee compensates the franchisor for the costs and efforts associated with granting the franchise, such as evaluating the franchisee, providing initial training, and setting up the franchisee with the necessary resources.
In addition to the initial franchise fee, the franchisee must also pay Azal Coffee's affiliate between $70,000 and $80,000 for the initial supply of goods, including coffee beans, tea, equipment, paper products, and other inventory items. This payment is also non-refundable. Furthermore, Azal Coffee may charge a non-refundable fee of up to $1,500 for an attorney to review the proposed lease agreement.