Does Chocolate Fish Coffee generally own the premises of its franchisees' businesses?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Before you open your business:
- A. Your site. We will review and advise you regarding potential locations that you submit to us. (Section 5.4). If you sign a Multi-Unit Development Agreement, we will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. We are not obligated to further assist you in locating a site or negotiating the purchase or lease of the site.
- (i) We generally do not own your premises.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 20–27)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the company generally does not own the premises of its franchisees' businesses. The FDD states that Chocolate Fish Coffee will review and advise franchisees regarding potential locations they submit. However, the document explicitly notes that Chocolate Fish Coffee is not obligated to further assist in locating a site or negotiating the purchase or lease of the site.
This arrangement means that prospective Chocolate Fish Coffee franchisees are responsible for finding and securing their own business locations, whether through purchase or lease. While Chocolate Fish Coffee offers guidance on site selection, the onus is on the franchisee to identify suitable locations and negotiate terms. The franchisor's approval is required for the site, and they consider factors such as general location, competition, demographics, traffic patterns, parking, size, physical characteristics, and lease terms.
The franchisee must provide all required information and documents about the site to Chocolate Fish Coffee for approval. Chocolate Fish Coffee has 30 days to approve or disapprove a proposed site after receiving all necessary documents. Failure to secure an approved site within the timeframe specified in the franchise agreement can result in default and potential termination of the agreement, unless an extension is granted.
Furthermore, Chocolate Fish Coffee is not obligated to assist franchisees in conforming the premises to local ordinances and building codes or in obtaining required permits; these responsibilities also fall to the franchisee. This is a fairly typical arrangement in the franchise industry, where franchisees usually bear the responsibility of securing and preparing their business locations, subject to the franchisor's approval and brand standards.