Does Coffee News waive any of my legal rights if I enter into a financing agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
There is no prepayment penalty. We will hold any such licensed rights to the licensed territories granted under the Coffee News License Agreement as security until you have paid your Promissory Note in full. There are no waivers of your legal rights and you are not barred from asserting a defense against us. We have no current practice or interest to sell, assign or discount to a third party all or part of the financing arrangement. If you do not pay on time, you hereby agree that Coffee News can call the loan and demand immediate payment of the full outstanding balance and obtain court costs and attorney's fees if a collection action is necessary. If Publisher / Debtor is a corporation, professional corporation, partnership, limited liability partnership, or a limited liability company, a Guarantee of Performance by the Principal stockholder(s), general partner(s), or member(s), as the case may be, must be executed.
Source: Item 10 — Financing (FDD pages 16–17)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, entering into a financing agreement with them does not require you to waive any legal rights. Specifically, the document states that "There are no waivers of your legal rights and you are not barred from asserting a defense against us." This means that as a franchisee, you retain all your legal protections and can still raise any valid defenses you may have against Coffee News, even if you have a financing agreement with them.
This is a significant benefit for prospective franchisees because it ensures that you are not giving up important legal safeguards in order to obtain financing. It's a fairly standard practice in franchising to ensure franchisees retain their legal rights, as waiving these rights could create an imbalance of power and potentially expose franchisees to unfair practices.
However, the document also states that if you fail to make timely payments, Coffee News has the right to call the loan, demand immediate payment of the outstanding balance, and recover court costs and attorney's fees if a collection action becomes necessary. Additionally, Coffee News will hold the licensed rights to the licensed territories as security until the promissory note is paid in full. Therefore, while you retain your legal rights, failing to meet your financial obligations can still result in significant consequences, including the loss of your franchise rights.