Does Azal Coffee retain the right to breakage from gift cards?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must participate in all gift cards, electronic gift or money cards (E-cards), frequency cards, awards or loyalty programs, or other programs specified by us and you must honor all cards, awards, and other programs issued by us or by other franchisees in accordance with our policies. You acknowledge and agree that your participation in those programs is integral to the Franchise Systems and to the success of those programs. We or a person designated by us will administer all gift and E-card or other programs specified by us. We retain the right to retain and use for our benefit any breakage from gift cards. We may charge an administrative fee for administrating those programs. We will have the right to charge you liquidated damages under Section 15.7 for each week that you fail to participate in any of these programs specified by us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees must participate in all gift card, electronic gift card, frequency card, awards, loyalty programs, or other programs that Azal Coffee specifies. Franchisees must honor all cards, awards and other programs issued by Azal Coffee or by other franchisees, according to Azal Coffee's policies. Azal Coffee or a person designated by them will administer all gift and E-card or other programs specified by them.
Azal Coffee retains the right to retain and use for its benefit any breakage from gift cards. Breakage refers to the value of gift cards that are never redeemed. Azal Coffee may charge an administrative fee for administering these programs.
Azal Coffee has the right to charge franchisees liquidated damages under Section 15.7 for each week that they fail to participate in any of these programs specified by them. This means that participation in the gift card program is not optional, and failure to participate can result in financial penalties for the franchisee.