Under what circumstances is the initial franchise fee for an Azal Coffee franchise refundable?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
INITIAL FEES**
You must pay an initial franchise fee of $25,000 for an Azal Coffee franchise. The initial franchise fee is payable in full at the time you sign the Franchise Agreement.
All initial franchise fees are earned at the time of payment and are not refundable under any circumstances. Initial franchise fees are uniform. It is our intent to charge all new franchisees the same initial franchise fee.
You must also pay our affiliate, Wholesale $70,000 to $80,000 for your initial supply of coffee beans, tea, coffee and tea mixes, equipment, paper products, syrups, sauces, milk, cups, mugs, branded products, coffee supplies, bakery goods, uniforms, and other inventory items. This range also includes the estimated cost to ship the goods to your Franchise Location. You must pay this fee before you open and immediately upon invoice. This payment is not refundable.
As part of our lease approval process, we may have an attorney review the proposed lease to ensure that the proposed lease meets our requirements. We will have a right to charge you a non-refundable fee up to $1,500 to cover the cost of that review. You must pay this fee within 7 days of demand. This payment is n
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the initial franchise fee of $25,000 is generally not refundable under any circumstances. The FDD states that all initial franchise fees are earned upon payment. This means that once a prospective franchisee pays the initial fee when signing the Franchise Agreement, they cannot get it back, regardless of whether they eventually open an Azal Coffee franchise.
In addition to the initial franchise fee, the franchisee must pay Azal Coffee's affiliate between $70,000 and $80,000 for the initial supply of goods. The FDD specifies that this payment is also non-refundable. Furthermore, if Azal Coffee has an attorney review the proposed lease, the franchisee may be charged a non-refundable fee of up to $1,500 to cover the cost of the review.
Item 7 of the FDD states that, "Except as may be noted, none of the payments to us are refundable." This reinforces the non-refundable nature of payments made directly to Azal Coffee. However, the document also clarifies that the refundability of payments to other parties is determined by the agreements the franchisee makes with those parties. Therefore, it is essential for a prospective Azal Coffee franchisee to carefully review all agreements and understand the refund policies of any third-party vendors or suppliers they engage with during the establishment of their franchise.