What happens if a Coffee News franchisee fails to comply with any requirements of the franchise agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
ove. The Weekly fee is more fully explained in Item 5 of the Franchise Disclosure Document. Initial fees and payments will be due upon Franchisor's completion of all pre-opening obligation.
- 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.
3. TERM AND RENEWAL.
- 3.1 Term. The term of this Agreement shall commence upon execution hereof by all parties hereto and shall expire on ______ 31, 20____, subject to earlier termination pursuant to the terms of this Agreement.
- 3.2 Renewal. Franchisee shall have the right to automatically renew this agreement for subsequent four (4) year periods provided that:
- (a) Performance of Obligations. Franchisee has duly performed its obligations hereunder to the satisfaction of Franchisor;
- (b) Agreement In Force. This Agreement is in full force at the end of the term provided for in paragraph 3.1 and Franchisee is not then in breach of any terms hereof:
- (c) Renewal Terms. The Franchisee hereby agrees that upon renewal, the Franchisee shall comply with the then current Coffee News Franchise Agreement, except that there shall be no additional deposit from the Franchisee. Franchisor shall furnish the Franchisee with a copy of Franchisor's then current Franchise Agreement (and related agreements), which Agreement the Franchisee must execute no later than 3 months prior to the expiration of this Agreement.
- (d) Notice. Franchisee must give written notice to Franchisor of its exercise of its option to renew at least six (6) months prior to the end of the first term, or at least six (6) months prior to the end of the first term of any renewal thereof.
4. SUPPLY OF PERIODICAL.
- 4.1 Form of Periodical. Franchisor shall supply to Franchisee a copy of the Periodical in a good quality photocopied state (the "Copy").
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, failure to make payments can lead to significant repercussions. Specifically, if a franchisee fails to make payments for additional or weekly fees within sixty days of the due date, Coffee News has the option to terminate all franchises and cease providing the periodical to the franchisee. This underscores the importance of maintaining timely payments to avoid potential business disruption and franchise termination.
Additionally, a franchisee's failure to meet obligations can impact their ability to renew their franchise agreement. To renew for subsequent four-year periods, a franchisee must have duly performed all obligations to the satisfaction of Coffee News and not be in breach of any terms of the agreement at the end of the current term. This condition emphasizes that consistent compliance with the franchise agreement is crucial for long-term business continuity and renewal eligibility.
Furthermore, if a franchisee has a promissory note with Coffee News and fails to pay interest, principal, or any other amount due, or breaches any covenant, Coffee News can declare the entire debt immediately due and payable. Coffee News also has the right to seize the licensed territory granted to the franchisee in the Coffee News Franchise Agreement. This clause highlights the serious financial risks associated with non-compliance and the potential loss of the franchise.