Under what condition will the Azal Coffee Review Fee be applied to the Transfer Fee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Review Fee | $10,000 | At the time of delivery of an offer notice | If you desire to accept an offer from a 3rd party to purchase your franchise, you must deliver an offer notice to us along with the review fee. If we do not exercise our right of 1st refusal and we consent to the transfer, the review fee will be applied to the transfer fee due. |
| Transfer Fee | 25% of the standard initial franchise fee being charged by us at the time of transfer | At the time of our consent to the transfer | You or the proposed transferee must pay a transfer fee if you transfer your franchise or any equity interest in the franchisee or substantially all the assets of |
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, a Review Fee of $10,000 is required when a franchisee desires to accept an offer from a third party to purchase their franchise. The franchisee must deliver an offer notice to Azal Coffee along with the Review Fee.
If Azal Coffee does not exercise its right of first refusal to purchase the franchise itself, and if Azal Coffee consents to the transfer of the franchise to the third party, then the Review Fee will be applied to the Transfer Fee. The Transfer Fee is 25% of the standard initial franchise fee being charged by Azal Coffee at the time of the transfer.
In practical terms, this means that the $10,000 Review Fee is essentially a deposit that is credited towards the Transfer Fee if the transfer is approved. However, if Azal Coffee exercises its right of first refusal or does not consent to the transfer, the franchisee would not get the Review Fee back, as indicated in Note (1) to Item 6 that all fees paid to Azal Coffee or its affiliates are non-refundable.