When must the transfer fee be paid to Azal Coffee for a franchise transfer?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
4.13 Manner and Timing of Payment.
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.
4.14 No Setoff; Application of Payments.
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, payments for transfer fees, among other fees, must be made by electronic or similar funds transfer from the franchisee's bank account to Azal Coffee's accounts. These payments must be made at the times specified in the Franchise Agreement or as otherwise specified by Azal Coffee. Azal Coffee may specify payment by electronic fund transfers that they initiate and may also require franchisees to make payments daily, weekly, or at other intervals instead of monthly.
This means that a prospective Azal Coffee franchisee needs to be prepared to potentially make payments more frequently than once a month, depending on what Azal Coffee specifies. They also need to authorize electronic fund transfers from their bank account to Azal Coffee. The franchisee cannot terminate this authorization as long as the Franchise Agreement is in effect and cannot close their bank account without providing prior written notice to Azal Coffee and establishing a substitute bank account for the transfers.
It is important for a potential Azal Coffee franchisee to understand that their obligation to pay fees is absolute and unconditional. They cannot delay or withhold payment based on alleged nonperformance by Azal Coffee or for any other reason. 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.
In the context of a franchise transfer, the timing of the transfer fee payment would be governed by the Franchise Agreement or as specified by Azal Coffee. A prospective franchisee should carefully review the Franchise Agreement and discuss the specific payment schedule with Azal Coffee to fully understand their obligations.