Can Ella Cafe condition its approval of a relocation on the payment of a minimum fee?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee will not relocate the Coffee House without Franchisor's express prior written consent.
If Franchisee is unable to continue the operation of the Coffee House at the Location because of the occurrence of an event of Force Majeure (or for other reasons not constituting an event of default under this Agreement), Franchisee may request Franchisor's consent to relocate the Coffee House to another location in the Designated Area.
Franchisor's approval may not be unreasonably withheld but may be conditioned upon the payment of an agreed minimum fee to Franchisor during the period in which the Coffee House is not in operation.
Selection of the relocation site and Coffee House construction, renovation, and opening procedures and timelines will be governed by this Article 6.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, Ella Cafe's approval for a franchisee to relocate their coffee house can be conditional. Specifically, if a franchisee is unable to continue operating at their current location due to events outside of their control (Force Majeure) or other reasons that do not constitute a default under the franchise agreement, the franchisee can request to relocate within their designated area.
Ella Cafe's approval of this relocation request may be subject to the franchisee paying an agreed minimum fee to Ella Cafe during the period the coffee house is not in operation. This fee is intended to compensate Ella Cafe for the disruption and potential loss of revenue during the relocation process.
It is important to note that the selection of the new relocation site, as well as the construction, renovation, and opening procedures and timelines, will still be governed by the standard procedures outlined in the franchise agreement. This ensures that the relocated Ella Cafe maintains the brand's standards and operational consistency.