What are the Ella Cafe franchisee's payment obligations during a Force Majeure event?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
If an event of Force Majeure occurs, then Developer will continue to be obligated to pay to Franchisor any and all amounts it is obligated to pay in accordance with the terms of this Agreement prior to the occurrence of such event, and the Indemnitees will continue to be indemnified and held harmless by Developer in accordance with Section 7.2.
Except as provided in the immediately preceding sentence, neither party will be held liable for a failure to comply with any terms and conditions of this Agreement when such failure is caused by an event of Force Majeure.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a Force Majeure event does not relieve the franchisee of their payment obligations. The document specifies that if a Force Majeure event occurs, the franchisee is still obligated to pay all amounts they were required to pay before the event. Additionally, the franchisee must continue to indemnify and hold harmless the Indemnitees as per Section 7.2 of the agreement.
This means that even if a natural disaster, pandemic, or other event defined as Force Majeure impacts the Ella Cafe franchisee's ability to operate, they must continue to meet their financial obligations to Ella Cafe. This could create a significant financial burden for franchisees during times when their business is disrupted and generating little to no revenue.
However, outside of these payment and indemnification obligations, neither Ella Cafe nor the franchisee will be held liable for failing to comply with other terms and conditions of the agreement if the failure is caused by a Force Majeure event. The franchisee is required to promptly notify Ella Cafe of the Force Majeure event, including a description of the event, its expected duration, and a plan for resuming operations. This notification must be done with due diligence, and failure to do so may result in liability for any damages caused by the delay.