Under what circumstances does Azal Coffee charge a Management Fee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Point-of-Sale System Fee | Not currently assessed | On receipt of billing | We do not currently, but reserve the right to, require you pay us each month for licensing and management fees associated with your point-of-sale system that we will distribute to the appropriate third-party vendors. |
| Maintenance, Repairs, Renovation, and Modernization | Not more than $75,000 every 5 years | As incurred | Maintenance, repair, renovation, and modernization fees are payable to us only if you do not perform required maintenance, repairs, renovation, and modernization.(4) |
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, they do not currently assess a Point-of-Sale System Fee, but reserve the right to do so in the future. If they do, this fee would be a monthly charge for licensing and management fees associated with the point-of-sale system that Azal Coffee will distribute to third-party vendors.
Additionally, Azal Coffee may charge franchisees a Maintenance, Repairs, Renovation, and Modernization fee. This fee, capped at $75,000 every 5 years, is only payable to Azal Coffee if the franchisee fails to perform the required maintenance, repairs, renovation, and modernization themselves. This incentivizes franchisees to keep their locations up to standard, but allows Azal Coffee to step in and ensure brand consistency if necessary.
It is important to note that Azal Coffee reserves the right to implement these fees in the future, so prospective franchisees should inquire about the likelihood and potential timing of these changes. Understanding these potential costs is crucial for accurate financial planning and assessing the overall profitability of an Azal Coffee franchise.