What specific costs related to the designated representative must a defaulting Baya Bar franchisee reimburse the franchisor?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.4.2 enter upon the Franchised Business location and exercise complete authority with respect to the operation thereof until such time as Franchisor determines that the default of Franchisee has been cured and that Franchisee is complying with the requirements of this Agreement. Franchisee specifically agrees that a designated representative of Franchisor may take over, control and operate the Franchised Business. In addition to all other fees paid under this Agreement, Franchisee shall pay Franchisor ten percent (10%) of the Gross Revenue generated by the Franchised Business during Franchisor's operation thereof as compensation therefor. Further, Franchisee shall reimburse Franchisor for the full compensation paid to such representative including the cost of all fringe benefits plus all travel expenses, lodging, meals and other expenses reasonably incurred by such representative until the default has been cured and Franchisee is complying with the terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, if a franchisee defaults on their agreement, Baya Bar has the option to send a designated representative to take over operations of the franchise. In this case, the franchisee is responsible for covering specific costs associated with the representative.
The defaulting franchisee must reimburse Baya Bar for the full compensation paid to the representative, including the cost of all fringe benefits. Additionally, the franchisee is responsible for covering all travel expenses, lodging, meals, and other expenses reasonably incurred by the representative during the period they are managing the franchise. This reimbursement continues until the default is resolved and the franchisee is back in compliance with the franchise agreement.
In addition to these reimbursements, Baya Bar will also collect ten percent of the gross revenue generated by the franchise during the period that the designated representative is in control. This compensation is separate from the reimbursement of the representative's specific costs and is paid to Baya Bar for their operational oversight.