Under what circumstances does All States M.E.D. charge a management fee?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 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. |
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, a management fee is charged under specific circumstances where All States M.E.D. or a third party steps in to manage the franchise outlet. This fee is triggered after the managing owner's death or disability, or in the event of the franchisee's default or abandonment of the business.
The management fee is structured as a daily charge of $250 per person, in addition to other costs and expenses incurred during the management period. This fee covers the expenses All States M.E.D. incurs when it has to take over the operations of a franchise due to unforeseen circumstances. The fee is due as incurred, meaning it becomes payable as the management services are provided.
This provision protects All States M.E.D. and ensures continuity of operations in challenging situations. For a prospective franchisee, it's crucial to understand these conditions and have contingency plans in place, such as key person insurance or robust operational procedures, to minimize the risk of triggering this management fee. It is also important to note that the management fee is in addition to other costs and expenses, which could potentially create a significant financial burden.