Under what condition can Benjamin Franklin Plumbing charge a Step In Fee?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
if you ask us to evaluate a potential vendor; payable whether or not we approve the vendor. Please see Item 8. |
| (1) Type of Fee | Amount | Date Due | Remarks |
|---|---|---|---|
| Management Fee | Up to $500 per day, plus our costs and overhead | Within 30 days after invoice | Payable only if: (a) the Key Person (see Item 15) dies or is incapacitated and we elect to manage the Franchised Business pending transfer of his or her interest; or (b) the Key Person is arrested for or formally charged with a serious criminal offense and we take over operation of the Franchised Business pending final disposition of the charges. |
| Step In Fee | Up to $500 per day, plus our costs and overhead | As invoiced | If you are in default under your Franchise Agreement, we have the right to step in and operate the Franchised Business until we determine the default has been cured. We may charge you a fee for these services. |
| Interest | 12% per annum or the maximum rate permitted by applicable law, whichever is less | With payment of overdue amount | Applies only if you do not pay us on time. We calculate interest from the date the payment was due until paid in full. |
| Late Fee | $100 for second occurrence of payment more than 30 days past due; $200 for third occurrence; $300 for each subsequent occurrence | With payment of overdue amount | We can charge a late fee to compensate us for our administrative costs incurred in enforcing your obligations to pay us and submit required reports to us. |
| Insufficient Funds Fee | $50 or the amount the bank charges us due to the insufficient funds, whichever is greater. | Upon demand | Payable if an electronic funds transfer payment request is returned due to insufficient funds. |
| Indemnity for Tax Withholding | Amount of any penalties, interest, and expenses we incur | As i |
Source: Item 6 — OTHER FEES (FDD pages 18–27)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, a Step In Fee can be charged under specific circumstances related to a franchisee's default. If a franchisee is in default under their Franchise Agreement, Benjamin Franklin Plumbing has the right to step in and operate the franchised business. This intervention continues until Benjamin Franklin Plumbing determines that the default has been resolved.
For this service of stepping in to operate the business during a period of default, Benjamin Franklin Plumbing may charge the franchisee a Step In Fee. This fee can be up to $500 per day, in addition to covering Benjamin Franklin Plumbing's costs and overhead expenses incurred during the period they are managing the business. The fee is invoiced to the franchisee.
This provision is important for prospective franchisees to understand, as it outlines the financial implications of failing to meet the obligations set forth in the Franchise Agreement. Defaulting on the agreement can lead to not only the loss of control over the business temporarily but also the incurrence of significant fees to cover Benjamin Franklin Plumbing's intervention.