On what page of the Casiola Franchise Agreement can I find information about withholding unlawful payments?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 23: RECEIPTS]
5.G. WITHHOLDING PAYMENTS UNLAWFUL
Franchisee agrees that under no circumstance is Franchisee entitled to withhold payments due to Franchisor under this Agreement. Among other things and without limitation to the foregoing, Franchisee expressly agrees that any claim by Franchisee as to the alleged non-performance of Franchisor's obligations shall not permit and/or entitle Franchisee to withhold payments due Franchisor under this Agreement.
ARTICLE 6 RESTRICTIVE COVENANTS AND OBLIGATIONS
6.A. NECESSITY FOR RESTRICTIVE COVENANTS
Franchisee agrees that only through the course of entering into this Agreement is Franchisee being provided with access to the System, Franchisor's training, use of the Licensed Marks, and access to the Operations Manual and Confidential Information. Franchisee agrees that competition by Franchisee, Owners and/or their immediate family members will jeopardize the System and cause irreparable harm to Franchisor and franchisees of Casiola Businesses. Accordingly, Franchisee and Franchisee's Owners agree to comply with the restrictive covenants set forth in this Agreement, including this Article 6.
6.B. RESTRICTIVE COVENANTS: KNOW-HOW
Franchisee agrees that, at all times, both during the Term of this Agreement and, after its expiration or termination, Franchisee: (a) shall not use the Know-How in any business or capacity other than the operation of the Franchised Business pursuant to this Agreement and as instructed by Franchisor; (b) shall maintain the confidentiality of the Know-How at all times; (c) shall not make unauthorized copies of documents containing any Know-How; (d) shall take all reasonable steps that Franchisor requires from time to time to prevent unauthorized use or disclosure of the Know-How; and (e) shall stop using the Know-How immediately upon the expiration, termination or Transfer of this Agreement. Franchisee agrees that the foregoing covenants shall also apply to: (a) Franchisee's Owners and that Franchisee's Owners shall each execute and deliver to Franchisor the Franchise Owner Agreement and Guaranty in the form attached
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, the information regarding withholding unlawful payments can be found on page 100. Specifically, section 5.G of Item 23 states that franchisees are not entitled to withhold payments due to Casiola under any circumstances. This includes situations where the franchisee claims Casiola has not performed its obligations.
This clause is significant for prospective franchisees as it means they cannot withhold royalty payments or other fees, even if they believe Casiola is in breach of contract. This type of clause is relatively standard in franchise agreements, as it ensures a consistent revenue stream for the franchisor, which is crucial for maintaining the franchise system.
However, it also places a considerable financial risk on the franchisee, who must continue to pay fees even if they are experiencing issues with Casiola's performance. Franchisees need to be aware of this obligation and factor it into their financial planning. If a franchisee has a dispute with Casiola, they will need to pursue other legal or contractual remedies to resolve the issue without withholding payments, which could be a costly and time-consuming process.
It is important for potential Casiola franchisees to fully understand this clause and seek legal advice to assess the implications before signing the Franchise Agreement. Understanding the remedies available to them in case of a dispute is crucial, as withholding payments is not an option.