Does the Coffee News Franchise Disclosure Document contain all agreements related to renewal, termination, transfer, and dispute resolution?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: Renewal, Termination, Transfer, and Dispute Resolution]
ITEM 17
RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.
THE FRANCHISE RELATIONSHIP
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| a. Term of the franchise. | Section 3.1, Exhibit A | 4 year term. |
| b. Renewal or extension of the term. | Section 3.2 Exhibit A | Right to renew agreement for another 4 years if provisions are met. |
| c. Requirements for you to renew or extend. See Note 7(c) for details. | Section 3.2 Exhibit A | Comply with terms in franchise agreement. You may be required to sign a franchise agreement containing terms and conditions that could be materially different from the original franchise agreement. |
| d. Termination by you. | Sections 13.3, 14.1, 14.3 | 120 days notice required. Deposit |
| Exhibit A | is nonrefundable. | |
| e. Termination by Coffee | None, Exhibit A | We will not terminate without cause. |
| News USA without cause. | ||
| f. Termination by Coffee News USA with cause. | Section 13.1, Exhibit A | We can terminate if you breach or default under any provision of the franchise agreement. |
| g. "Cause" defined defaults | None, Exhibit A | There exists no provisions for |
| which can be cured. | defaults which may be cured. | |
| h. "Cause" defined defaults that cannot be cured. | Sections 13.1, 13.2, Exhibit A | Waivers for prior breaches or defaults are not binding against same or different breaches or defaults. |
| i. Your obligations on termination / nonrenewal. | Section 14.3, Exhibit A | You shall return all materials and information relevant to sales and production of Coffee News. |
| j. Assignment of contract by Coffee News USA. | Section 11.1, Exhibit A | Franchise agreement does not specifically restrict or permit us to assign our rights but this section does suggest that it is permitted. |
| k. "Transfer" by you | Sections 11.2, 11.3, 16.4, | Transfers are prohibited unless we |
| definition. | Exhibit A | consent. |
| l. Coffee News USA's | Sections 11.2, 16.4, | Our consent to transfer will not be |
| approval of transfer by you. | Exhibit A | unreasonably withheld. |
| m. Conditions for Coffee News USA's approval of transfers. | Not Applicable | We do not provide conditions for approval of transfers. |
| n. Coffee News USA's right of first refusal to acquire your business. | Sections 11.2; 11.3 Exhibit A | Not applicable. |
| o. Coffee News USA's | Not Applicable | Not applicable. |
| option to purchase your | ||
| business. | ||
| p. Your death or disability. | Not Applicable | There are no specific provisions that address what happens when you die or become disabled. |
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| q. Non-competition covenants during the term of the franchise. | Section 8.5, Exhibit A | No involvement in competing business in your state. |
| r. Non-competition covenants after the franchise is terminated or expires. | Section 8.5, Exhibit A | No involvement in competing business in your state for 2 years following termination. |
| s. Modification of agreement. | Section 16.1, Exhibit A | Agreement may not be changed except by the mutual consent of both parties. |
| t. Integration / merger clause. | Section 11.3, Exhibit A | Only the terms of the franchise agreement are enforceable, subject to state law. Any representations or promises outside of the disclosure document and franchise agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation. | Section 16.8, Exhibit A | Arbitration must be held at a location within Maine, unless the parties mutually agree to an alternative location. |
| v. Choice of forum. | Section 16.2, Exhibit A | Litigation must be in U.S. District Court for the District of Maine. |
| w. Choice of law. | Section 16.2, Exhibit A | Maine laws apply. |
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, Item 17 and the table within it summarize key provisions related to renewal, termination, transfer, and dispute resolution. The FDD explicitly states that the table lists "certain important provisions of the franchise and related agreements" and directs prospective franchisees to read the agreements attached to the disclosure document. This indicates that the FDD provides summaries of these critical aspects of the franchise agreement, but the complete details are found in the actual agreements themselves.
The table outlines various scenarios, including the term of the franchise (4 years), conditions for renewal (meeting certain provisions and potentially signing a new agreement with different terms), termination rights for both the franchisee and Coffee News, transfer conditions, and dispute resolution processes like arbitration and litigation. For instance, a franchisee needs to provide 120 days' notice to terminate the agreement, and their deposit is nonrefundable. Coffee News can terminate the agreement if the franchisee breaches any provision, and waivers for prior breaches are not binding.
Regarding dispute resolution, the agreement specifies that arbitration must occur within Maine unless both parties agree otherwise, and litigation must take place in the U.S. District Court for the District of Maine, with Maine laws governing the agreement. Furthermore, any statements or agreements not included in the franchise agreement may not be enforceable.
Prospective franchisees should carefully review the full franchise agreement and exhibits, paying close attention to the sections referenced in Item 17's table. Understanding the complete context of these provisions is crucial before making a final investment decision, as the summaries in the FDD provide an overview but do not contain all the specific details. It is also important to note that the renewal agreement may contain materially different terms from the original agreement.