When are charges for insurance procured by the Ella Cafe franchisor due from the franchisee after notice?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor has the right to terminate this Agreement, which termination will become effective upon delivery of written notice of termination, if Franchisee fails to cure the following defaults within 10 days after delivery of written notice: (a) failure to obtain or maintain required insurance coverage; (b) failure to pay any amounts due Franchisor; (c) failure to pay any amounts due to the landlord of the Coffee House premises, suppliers, or other trade creditors (unless such amount is subject to a bona fide dispute); (d) failure to pay any amounts for which Franchisor has advanced funds for or on Franchisee's behalf, or upon which Franchisor is acting as guarantor of Franchise's obligations; (e) violation of any provision of this Agreement concerning the use and protection of the Marks or Copyrighted Works; or (f) violation of any provision of this Agreement concerning the preparation, service, appearance, or quality of ELLA or ELLA COFFEE HOUSE products.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
The 2024 Ella Cafe Franchise Disclosure Document specifies the timeframe for curing defaults, including failure to pay amounts due to the franchisor. If an Ella Cafe franchisee fails to pay any amounts due to the franchisor, they have 10 days after receiving written notice to cure the default.
This means that if Ella Cafe procures insurance on behalf of the franchisee and the franchisee fails to pay the associated charges, Ella Cafe can issue a written notice of default. The franchisee then has a 10-day period to pay the outstanding amount and maintain the required insurance coverage. Failure to cure the default within this 10-day period allows Ella Cafe to terminate the franchise agreement.
It is important for prospective Ella Cafe franchisees to understand these terms, as failure to maintain insurance or pay amounts due can lead to the termination of their franchise agreement. Franchisees should ensure they have sufficient funds to cover insurance costs and promptly address any payment issues to avoid default.