Under what circumstances does Bang Cookies charge non-compliance fees?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. |
|---|---|---|---|
| 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. |
| 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 |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, there are several circumstances under which non-compliance fees may be charged. Bang Cookies may charge fees, costs, and expenses incurred as a result of a franchisee's breach or noncompliance with the terms of the Franchise Agreement, payable on demand. Additionally, there are specific non-compliance fees related to reporting, operations, and payments.
Reporting non-compliance, which involves the failure to submit Royalty and Activity Reports and other required financial statements in a timely manner, incurs a fee of $150 per occurrence, payable within 14 days of the invoice. Operational non-compliance, which is the failure to comply with operational standards specified in the Franchise Agreement, results in a fee ranging from $450 to $1,000 per occurrence, plus any inspection and re-inspection costs incurred by Bang Cookies; this is also payable within 14 days of the invoice. Payment non-compliance, which is the failure to make timely payments of fees due under the Franchise Agreement, incurs a fee of $150 per occurrence, plus interest, costs, and legal fees, and is payable within 14 days of the invoice.
These non-compliance fees are in addition to other potential fees, such as interest on overdue amounts at a rate of 18% per annum from the due date, and fees for NSF checks or failed electronic fund transfers, which are 5% of the amount or $50, whichever is greater. Furthermore, if a financial audit determines underreporting of 2% or greater during any designated audit period, the franchisee is responsible for the cost of the audit, including audit, legal, travel, and reasonable accommodation fees incurred by Bang Cookies. These fees are designed to ensure franchisees adhere to the standards and requirements set forth in the Franchise Agreement and to compensate Bang Cookies for any costs incurred due to non-compliance.