Can Azal Coffee prescribe the maximum retail prices that I may charge customers?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
8.7 Pricing; Promotional Programs; Gift Cards.
We may exercise rights with respect to the pricing of Authorized Products to the fullest extent permitted by then-applicable law in order to enhance the competitive position and consumer acceptance for the products and services of Stores. These rights may include: (a) prescribing the maximum and/or minimum retail prices that you may charge customers for the products and/or services offered and sold at the Franchise Business; (b) recommending retail prices; (c) advertising specific retail prices for some or all products or services sold by the Franchise Business and requiring you to observe those prices; (d) engaging in marketing programs, promotional programs, drives, giveaways, discounts, coupons, contests and other campaigns and requiring you to participate in those programs, which may directly or indirectly impact your retail prices (e.g. the anniversary event requiring a "buy-one get-one free" promotion for three to five days); and (e) otherwise mandating, directly or indirectly, the maximum and/or minimum retail prices that the
Franchise Business may charge the public for the products and services it offers. We may engage in this activity either periodically or throughout the term of this Agreement. Further, we may engage in this activity only in certain geographic areas (e.g., cities, states, regions) and not others, or with regard to certain subsets of franchisees (e.g., airports, arenas, other captive audiences) and not others. You acknowledge and agree that any maximum, minimum, or other prices and programs we prescribe or suggest may or may not optimize the revenues or profitability of the Franchise Business and you irrevocably waive all claims arising from or related to our specification or suggestion of retail prices and programs for the Franchise Business.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee has rights regarding the pricing of authorized products, to the extent permitted by law. These rights are intended to enhance the competitive position and consumer acceptance of Azal Coffee products and services.
Azal Coffee's rights include prescribing maximum and minimum retail prices you can charge, recommending retail prices, advertising specific retail prices and requiring you to observe them, and mandating maximum or minimum retail prices directly or indirectly. They may also require you to participate in marketing and promotional programs that impact your retail prices, such as 'buy-one-get-one-free' promotions.
Azal Coffee may exercise these rights periodically or throughout the agreement term, and only in certain geographic areas or with specific franchisee subsets. The document states that the prices and programs Azal Coffee prescribes or suggests may or may not optimize your revenues or profitability. As a franchisee, you irrevocably waive all claims related to Azal Coffee's pricing specifications or suggestions.
This means that as an Azal Coffee franchisee, you may have limited control over pricing decisions, and Azal Coffee can mandate specific pricing strategies. It is important to consider the potential impact of these pricing controls on your store's profitability and to discuss any concerns with Azal Coffee before signing the agreement.