Does the expiration or termination of the Ella Cafe agreement release the franchisee from accrued liabilities?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
The expiration, earlier termination, or exercise of Franchisor's rights pursuant to Section 14. of this Agreement will not discharge or release Franchisee or any Owner from any liability or obligation then accrued, or any liability or obligation continuing beyond, or arising out of, the expiration, the earlier termination, or the exercise of such rights under this Agreement.
Additionally, Franchisee and Owners will pay all court costs and reasonable attorneys' fees and costs incurred by Franchisor in obtaining any remedy available to Franchisor for any violation of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the expiration or termination of the Franchise Agreement does not release the franchisee from accrued liabilities. Upon termination or expiration, franchisees must still pay all amounts owed to Ella Cafe based on the business's operation through the effective termination date.
This means that even after the franchise agreement ends, either through expiration of the term or earlier termination, the franchisee remains responsible for any outstanding financial obligations. These obligations could include unpaid franchise fees, royalties, supplier payments, or any other debts incurred during the operation of the Ella Cafe business.
Furthermore, the FDD states that all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect. This indicates that certain responsibilities and duties outlined in the franchise agreement continue even after the agreement's termination or expiration. Ella Cafe also states that the franchisee and owners will pay all court costs and reasonable attorneys' fees and costs incurred by Ella Cafe in obtaining any remedy available for any violation of the Agreement.