What is the amount of the operations non-compliance fee for Bang Cookies franchisees for each instance of selling non-approved services or products?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
t Franchisor may elect to provide management services, if any, and the extent of such services, and/or the discontinuation thereof, shall be exclusively determined by Franchisor in Franchisor's Reasonable Business Judgment. The Management Service Fee shall be immediately payable upon invoice by us.
- (4) Franchisee will at all times maintain sufficient working capital to fulfill its obligations under this Agreement.
7.K. REMEDIES FOR NONCOMPLIANCE WITH OPERATIONAL STANDARDS
In addition to all other rights afforded to Franchisor under this Agreement, in connection with any, each, and every violation of any term, provision, and/or operational requirement as set forth in this Article 7 (an "Operations Violation"), within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor an operations non-compliance fee (the "Operations Non-Compliance Fee") in the amount of: (a) $1,000 for each and every instance / event related to an Operations Violation involving the sale of services and/or products that are not Approved Services and Products; (b) $1,000 for each and every instance / event related to an Operations Violation involving the failure to exclusively use System Supplies, and/or Franchisor designated suppliers; and (c) $450 for all other Operations Violation. Additionally, in each of the foregoing instances, within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor all costs and expenses incurred by Franchisor in connection with any inspections, audits, and/or re-inspections directed and/or undertaken by Franchisor for the purpose, as det
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees who violate operational standards by selling services or products that are not on the approved list will incur a non-compliance fee. Specifically, for each instance where a Bang Cookies franchisee sells services or products that have not been approved by the franchisor, they will be charged $1,000. This fee is in addition to any other rights Bang Cookies has under the franchise agreement. Franchisees are required to pay this fee within 14 days of receiving an invoice from Bang Cookies.
This policy underscores the importance of adhering strictly to Bang Cookies' approved offerings. The $1,000 fee per instance can quickly become a significant financial burden if a franchisee repeatedly violates this operational standard. It is crucial for franchisees to stay informed about the current list of approved services and products, as Bang Cookies retains the right to modify this list.
In addition to the non-compliance fee, Bang Cookies may also charge the franchisee for any costs associated with inspections, audits, or re-inspections required to verify that the violation has been corrected. This further emphasizes the financial risk associated with non-compliance and the importance of maintaining operational standards. All rights and remedies of Bang Cookies are cumulative and do not interfere with any other rights or remedies as set forth in the agreement.
Franchisees should ensure they have a clear understanding of what constitutes an "Approved Service and Product" by carefully reviewing the operations manual and any updates provided by Bang Cookies. Proactive communication with the franchisor regarding any uncertainties can help avoid inadvertent violations and the associated fees.