Is the deposit refundable if a Coffee News franchisee terminates the agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| d. Termination by you. | Sections 13.3, 14.1, 14.3 | 120 days notice required. Deposit |
| Exhibit A | is nonrefundable. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 25–27)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, if a franchisee decides to terminate the franchise agreement, the deposit is nonrefundable. The FDD outlines various provisions related to termination, including the requirements for the franchisee to provide a 120 days notice. However, it explicitly states that the deposit will not be returned to the franchisee upon termination.
This has significant implications for potential Coffee News franchisees. It means that a portion of their initial investment is at risk should they choose to end the franchise agreement, regardless of the circumstances leading to the termination. This is a fairly standard practice in franchising, as the initial deposit often covers the franchisor's expenses in setting up the franchise and providing initial training and support.
Prospective franchisees should carefully consider this nonrefundable deposit and factor it into their financial planning. It is crucial to fully understand the terms and conditions under which termination can occur and the potential financial consequences. Franchisees should also evaluate their long-term commitment to the Coffee News franchise to mitigate the risk of forfeiting the deposit.