Is the Coffee News franchisor required to terminate the franchise if payments are late?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.2 Failure to Make Payment. 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.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the franchisor has the option to terminate the franchise agreement if payments are not made on time. Specifically, if a franchisee fails to make payment of additional or weekly fees within sixty days of the due date, Coffee News, at its discretion, may terminate the franchise and cease providing the periodical. This clause provides Coffee News with recourse in the event of prolonged non-payment, but does not obligate them to terminate the agreement.
This policy means that as a Coffee News franchisee, you must ensure timely payments of all fees. Failure to do so not only risks termination of your franchise agreement but also the loss of the right to receive the Coffee News periodical, which is essential for operating the business. The 60-day window offers a grace period, but consistent late payments could lead to the franchisor exercising its right to terminate the agreement.
It is important to note that the termination is not automatic. Coffee News retains the option to decide whether to terminate the agreement based on the circumstances. This flexibility could allow for negotiation or a payment plan in certain situations, but it also means that the risk of termination for late payments ultimately rests on the franchisor's decision. A prospective franchisee should discuss the conditions under which Coffee News has previously terminated agreements.