What is the operations non-compliance fee for Bang Cookies franchisees for each instance of failing to exclusively use System Supplies or designated suppliers?
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 fail to exclusively use System Supplies or designated suppliers will incur an operations non-compliance fee. Specifically, for each instance or event related to this type of operations violation, Bang Cookies will charge the franchisee $1,000. This fee is in addition to any costs and expenses Bang Cookies incurs for inspections, audits, or re-inspections to determine if the violation has been corrected. Franchisees are required to pay this fee within 14 days of receiving an invoice from Bang Cookies.
This policy underscores the importance Bang Cookies places on maintaining uniformity and quality control across all franchise locations. By mandating the use of approved System Supplies and designated suppliers, Bang Cookies aims to ensure that all products meet their standards and that the customer experience is consistent regardless of location. The Operations Manual further details the specific System Supplies and designated vendors that franchisees must use.
For a prospective Bang Cookies franchisee, this means that strict adherence to the approved supplier list is crucial to avoid incurring these fees. It is essential to understand exactly what constitutes System Supplies and which suppliers are designated by Bang Cookies. Failure to comply can result in significant financial penalties, especially if violations occur repeatedly. Franchisees should also factor in potential costs associated with inspections and audits if non-compliance issues arise.
It is also important to note that this non-compliance fee does not represent Bang Cookies' consent to operational violations, and they retain all other rights and remedies outlined in the franchise agreement. This includes the right to take further action, including termination of the franchise agreement, for repeated or severe violations. Therefore, franchisees must prioritize compliance with operational standards to maintain a positive relationship with Bang Cookies and avoid potential penalties.