Does the Coffee News Franchise Agreement excuse performance due to financial loss?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless otherwise prohibited by law, failure to make payment of either the deposit for additional or weekly fees in accordance with Schedule A for a period of sixty (60) days from the due date may result in the loss of all Franchises and termination of receipt of the Periodical by Franchisee, at the option of Franchisor.
The Debtor acknowledges and hereby agrees to grant Holder, with any and all the licensed rights to the territory that was granted to Debtor in the foregoing Coffee News Franchise Agreement, to secure the payment set forth in this Promissory Note and to secure the performance of all covenants and agreements contained herein. In the event of a failure to pay interest, principal or any other amount due on this Promissory Note in accordance with its terms, or of a breach of any other covenant, condition or agreement contained herein, remaining uncured for a period in excess of five (5) days (except that no grace period shall be permitted for a default under this Note or the foregoing Coffee News Franchise Agreement), or any breach in the covenants, conditions or agreements in any instrument given in connection with the Promissory Note and debt secured hereby, or if a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against the undersigned, or if the foregoing Coffee News Franchise Agreement for which the parties have entered into this Promissory Note is terminated for any reason, then the entire debt secured hereby, together with all charges to which Holder would be entitled under the Promissory Note or by law if the Promissory Note were prepaid in full, shall be due and payable, Holder shall have the
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
Based on the 2025 Coffee News Franchise Disclosure Document, the agreement does not contain explicit clauses that excuse a franchisee's performance due to financial loss. However, the document does outline the consequences of failing to make payments, which could be related to financial difficulties. Specifically, if a franchisee fails to make payments for additional or weekly fees for 60 days, Coffee News has the option to terminate the franchise and cease providing the periodical.
Additionally, the FDD mentions a Promissory Note that franchisees might enter into, which is secured by the rights to the Coffee News territory. If a franchisee fails to pay interest, principal, or any other amount due on this note, or breaches any agreement related to it, and the failure remains uncured for more than five days, the entire debt becomes due. In such cases, Coffee News has the right to realize the security, including selling the franchise.
While the Coffee News agreement doesn't directly excuse performance due to financial loss, these clauses highlight the importance of maintaining financial stability to avoid potential termination or loss of the franchise. A prospective franchisee should carefully consider their financial situation and ability to meet ongoing obligations before entering into the agreement. It would be prudent to discuss potential scenarios of financial hardship with Coffee News to understand if there are any mechanisms for support or leniency in such situations.