On what page of the Casiola franchise agreement is the section on withholding payments unlawful located?
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 Casiola's 2024 Franchise Disclosure Document, the section regarding the unlawfulness of withholding payments is located on page 100 of the franchise agreement. Specifically, section 5.G of Item 23 states that franchisees are not entitled to withhold payments due to Casiola under any circumstances, even if they believe Casiola is not fulfilling its obligations.
This clause means that a Casiola franchisee cannot legally withhold royalty payments or other fees owed to Casiola, even if they have a dispute with the franchisor. For example, if a franchisee believes Casiola has breached the franchise agreement, they still must continue to make all required payments. Failure to do so could result in penalties or termination of the franchise agreement.
Such a clause is relatively common in franchise agreements, as franchisors want to ensure a steady stream of revenue. However, it places a significant burden on the franchisee, who must continue to pay even when they have a legitimate grievance. Prospective franchisees should carefully consider this provision and seek legal advice to understand their rights and obligations. They may also want to negotiate with Casiola to include provisions that allow for mediation or arbitration of disputes before payments are due.