What is the maximum amount of the Technology Fee that Ella Cafe can impose per month?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
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- (iii) All amounts due and owing (unless such amount is subject to a bona fide dispute) pursuant to Franchisee's agreements and contracts with all Designated Suppliers and Franchisee's other trade creditors and Franchisee's landlord.
- 4.4. Technology Fee. The parties acknowledge and agree that the technological environment is rapidly changing and that it is difficult to anticipate the cost of developing, acquiring, implementing, and licensing Internet and communications technologies that may benefit franchisees of the System. Accordingly, in addition to the Royalty Fee, Franchisor reserves the right to impose a Technology Fee up to $500 per month ("Technology Fee"). Franchisor shall indicate the amount of the current Technology Fee in its Manual or other written communication. Franchisor reserves the right to enter into a master license agreement with any software or technology supplier and sublicense the software
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, Ella Cafe reserves the right to impose a Technology Fee on franchisees. This fee is intended to cover the costs associated with developing, acquiring, implementing, and licensing internet and communications technologies that may benefit the Ella Cafe franchise system. The document states that the Technology Fee can be up to $500 per month.
This Technology Fee is in addition to the Royalty Fee that franchisees must pay. The exact amount of the Technology Fee, if any, will be specified in Ella Cafe's Manual or other written communication. This means that while the maximum is $500, the actual fee could be lower or even $0 if Ella Cafe chooses not to implement it at a given time.
In addition to the Technology Fee, Ella Cafe also reserves the right to require franchisees to use specific software, for which subscription fees may need to be paid directly to the software service provider. This implies that franchisees could potentially face additional technology-related expenses beyond the stated Technology Fee. It is important for prospective franchisees to clarify with Ella Cafe what specific technologies and software they will be required to use and the associated costs.