What does the All States M.E.D. 'Cost of Enforcement' fee cover?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
_14_Picture_0.jpeg)
| Type of Fee | Amount | Due Date | Remarks | |
|---|---|---|---|---|
| Transfer Fee | $15,000 | Before transfer completed | No charge if Franchise Agreement transferred to an entity you control. The amount of this fee is subject to applicable state law. FA 18.2(h). | |
| De-Identification Reimbursement Fee | Actual costs incurred | As incurred | If you fail to de-identify upon termination or expiration of the Franchise Agreement, we may make such changes and you agree to reimburse any cost we incur to do so. FA 17.3. | |
| Management Fee | $250 per person per day (plus other costs and expenses) | As incurred | Due when we (or a third party) manage your outlet after your managing owner's death or disability, or after your default or abandonment. FA 16.5, 18.6. | |
| Indemnification | Actual costs | As incurred | You must reimburse us if we are held liable for claims from your outlet's operation. FA 21.3. | |
| Cost of Enforcement | All costs, including reasonable attorneys' fees | Upon demand | You must reimburse us for all costs in enforcing obligations if we prevail. FA 22. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the 'Cost of Enforcement' fee covers all costs incurred by All States M.E.D. when enforcing a franchisee's obligations, including reasonable attorneys' fees. This fee is due upon demand.
In practical terms, this means that if All States M.E.D. has to take legal action against a franchisee to ensure compliance with the Franchise Agreement, and All States M.E.D. prevails in court or through another legal process, the franchisee will be responsible for reimbursing All States M.E.D. for all the expenses incurred during the enforcement process. This includes not only the direct costs of litigation but also the legal fees charged by All States M.E.D.'s attorneys.
This is a fairly standard clause in franchise agreements. It is designed to protect the franchisor from bearing the costs of enforcing the agreement when a franchisee is in violation. For a prospective All States M.E.D. franchisee, this highlights the importance of adhering to the terms and conditions outlined in the Franchise Agreement to avoid potential legal disputes and the associated costs of enforcement, which can be substantial.