What fees, costs, and expenses are associated with non-compliance for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
nth per kiosk | As incurred | | | Interest | 18% per annum from due date | On demand | Payable on all overdue amounts, fees, charges, and payments due to us under the Franchise Agreement. Interest rate cannot exceed legal rate allowed by law and may be adjusted to reflect same. | | Reporting Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely submit Royalty and Activity Reports, and other reports and financial statements as required under Franchise Agreement. | | Operations Non-Compliance | $450 to $1,000 per occurrence | 14 days of invoice | Payable for failure to comply with operational standards as required and specified under Franchise Agreement, plus inspection and re-inspection costs incurred by us. | | Payment Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely pay, when due, a fee or payment due to us under the Franchise Agreement, plus interest, costs and legal fees. | | Audit | Cost of audit | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated audit period. Includes fees incurred by us including audit, legal, travel and reasonable accommodations. | | Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. | | Collections | Actual fees, costs, and expenses | On demand | For costs and expenses incurred by us in collecting fees due to us, and/or to enforce the terms of the Franchise Agreement or a termination of the Franchise Agreement. Includes costs and expenses of re-inspections required by quality assurance audit. | | NSF Check Fee of Failed Electronic Fund Transfer | 5% of amount or $50 whichever is greater | On demand | Payable if your bank account possesses insufficient funds and/or fails to process |
| Non-compliance | Actual fees, costs, and expenses | On demand | Fees, costs and expenses incurred by us as a result of your breach or noncompliance with the terms of your Franchise Agreement. |
|---|---|---|---|
| Supplier Review | Actual fees, costs, and expenses | Within 14 days of invoice | You must pay us the costs incurred by us to review and evaluate a potential supplier, product, or service that you submit to us for approval. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, franchisees may incur several fees, costs, and expenses related to non-compliance with the Franchise Agreement. These include interest on overdue amounts, reporting non-compliance fees, operations non-compliance fees, payment non-compliance fees, audit costs, quality assurance audit costs, collection costs, NSF check fees, and general non-compliance fees. Interest accrues at 18% per annum from the due date on all overdue amounts.
Specifically, if a Bang Cookies franchisee fails to submit Royalty and Activity Reports or other required financial statements on time, they will be charged a Reporting Non-Compliance fee of $150 per occurrence, payable within 14 days of the invoice. Failure to comply with operational standards can result in Operations Non-Compliance fees ranging from $450 to $1,000 per occurrence, plus the cost of any inspections and re-inspections. Similarly, Payment Non-Compliance, such as failing to make timely payments, incurs a fee of $150 per occurrence, along with interest, costs, and legal fees.
Further, Bang Cookies may conduct a financial audit if they suspect underreporting, and if the audit reveals underreporting of 2% or greater, the franchisee will be responsible for the cost of the audit, including audit, legal, travel, and accommodation fees. Franchisees may also be charged for quality assurance audits conducted by third parties. Additionally, franchisees are responsible for all costs and expenses Bang Cookies incurs in collecting overdue fees or enforcing the Franchise Agreement, including re-inspection costs from quality assurance audits. An NSF check fee or failed electronic fund transfer fee is also applied, which is the greater of 5% of the amount or $50. Finally, general non-compliance with the Franchise Agreement results in the franchisee paying Bang Cookies's actual fees, costs, and expenses incurred due to the breach or noncompliance.