factual

Under what conditions must an Ella Cafe franchisee reimburse the franchisor for on-site assistance?

Ella_Cafe Franchise · 2024 FDD

Answer from 2024 FDD Document

s Agreement, we may impose a fee ("Default Fee") in an amount up to $1,500 per event of default, plus the cost of re-inspections and the costs enforcing compliance. You must pay the Default Fee within 3 days of our demand.

ARTICLE 5. TRAINING AND ASSISTANCE

  • 5.1 Pre-Opening Assistance. In addition to the site selection assistance described in Section 6.1, Franchisor will provide pre-opening consultation and advice it deems appropriate by telephone or other remote means, which may include advice regarding site development and build-out; training; purchasing and inventory control; and such other matters as Franchisor deems appropriate. If Franchisee requests on-site assistance, or if Franchisor deems on-site assistance necessary, Franchisor may at its sole discretion provide such service, and upon which, the Franchisee must reimburse Franchisor the costs of transportation, lodging, and meals for the individual(s) providing such on-site assistance. If requested by Franchisee, Franchisor may review and advise on Franchisee's pre-opening business plan and financial projections. Franchisee acknowledges that Franchisor accepts no responsibility for the performance of the Franchised Business.
  • 5.2. Initial Training. If this is Franchisee's first Coffee House, before the Opening Date of the Coffee House, Franchisor shall provide standard pre-opening training to the Principal Executive and up to 2 other employees, at Franchisor' headquarters and/or any other location designated by the Franchisor. Principal Executive and up to two employees must attend and complete to Franchisor's satisfaction, Franchisor's then-current initial training program. The initial training program is provided at no charge for up to 3 individuals including the Principal Executive and will take place at a location and time that Franchisor designates.

Source: Item 22 — CONTRACTS (FDD page 50)

What This Means (2024 FDD)

According to Ella Cafe's 2024 Franchise Disclosure Document, a franchisee may be required to reimburse Ella Cafe for on-site assistance under two specific circumstances. First, if the franchisee requests on-site assistance, or if Ella Cafe deems it necessary, the franchisee must cover the costs of transportation, lodging, and meals for the personnel providing the assistance. This applies to pre-opening consultation and advice.

Second, if Ella Cafe conducts an on-site evaluation of a proposed site or provides in-person site selection assistance, the franchisee is responsible for reimbursing Ella Cafe's out-of-pocket costs. These costs include transportation, lodging, and meals. However, Ella Cafe will pay for the first site evaluation report if one is required.

It is important to note that while Ella Cafe may offer assistance with site selection and pre-opening activities, the ultimate responsibility for site selection and the performance of the franchised business rests solely with the franchisee. This means that even with on-site support, the franchisee bears the financial risk and must ensure the business's success.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.