How must payments to Azal Coffee for royalties and other fees be made?
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 must make all payments to Azal Coffee and its affiliates via electronic or similar funds transfer from their bank account to Azal Coffee's accounts. These payments encompass a wide range of fees, including royalties, 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, maintenance expenses, liquidated damage amounts, and any other amounts owed.
Azal Coffee specifies the amounts, timing, and manner of these payments. The agreement allows Azal Coffee to initiate electronic fund transfers and requires franchisees to authorize these transfers by signing and delivering necessary documents to their bank and to Azal Coffee. This authorization cannot be terminated while the Franchise Agreement is in effect, and franchisees must provide prior written notice before closing their bank account and establishing a substitute account for these transfers.
Furthermore, Azal Coffee has the right to specify that payments be made daily, weekly, or at other intervals instead of monthly, and acknowledges that these payment intervals may differ among franchisees. The franchisee's obligation to pay these fees is absolute and unconditional, meaning they cannot delay or withhold payments based on alleged nonperformance or other reasons, nor can they put the fees in escrow or setoff against any claims against Azal Coffee. Azal Coffee can apply payments first to any accrued late charges or interest and then to any delinquent fees before crediting the payment to the current amount due.