Are the payment obligations of an Azal Coffee franchisee for fees and other amounts owed considered absolute and unconditional?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the payment obligations of a franchisee are considered absolute and unconditional. Franchisees must make full and timely payments of all fees and other amounts owed to Azal Coffee.
Specifically, franchisees are not allowed to delay or withhold payments based on alleged nonperformance by Azal Coffee or for any other reason. They also cannot put the fees or other amounts in escrow or set them off against any claims they may have against Azal Coffee. This means that even if a franchisee believes Azal Coffee has breached the agreement, they are still obligated to make all required payments.
Azal Coffee has the right to apply any payments received first to cover accrued late charges or interest, and then to any delinquent fees or other outstanding amounts, before crediting the payment to the current amount due or as otherwise specified by the franchisee. This ensures that any outstanding debts are prioritized before current obligations are met. This type of clause is common in franchise agreements to protect the franchisor's revenue stream and ensure consistent payments.