Is the Non-Compliance fee a penalty or estimate of all damages arising from a Better Blend Franchisee's breach?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
mployee to BBF's training program after opening, BBF may charge its then-current training fee. As of the date of this Agreement, the training fee is $250 per person per day.
- 4.6 Non-Compliance Fee. BBF may charge Franchisee $500 for each instance of noncompliance with the System Standards or this Agreement (other than Franchisee's non-payment of a fee owed to BBF) which Franchisee fails to cure after 30 days' notice. Thereafter, BBF may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of BBF's internal cost of personnel time attributable to addressing the noncompliance, and it is not a penalty or estimate of all d
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the non-compliance fee is not considered a penalty or an estimate of all damages resulting from a franchisee's breach of the agreement. Instead, it is viewed as a reasonable estimation of Better Blend's internal costs related to the personnel time spent addressing the non-compliance.
Better Blend may charge a franchisee $500 for each instance of noncompliance with the System Standards or the Franchise Agreement, excluding non-payment of fees owed to Better Blend, if the franchisee fails to correct the issue after 30 days' notice. Following this initial charge, Better Blend may then charge the franchisee $250 per week until the non-compliance is resolved.
It is important to note that this non-compliance fee is in addition to any other rights and remedies that Better Blend may have, including default and termination rights as outlined in the agreement. This means that a franchisee could face both the non-compliance fees and other penalties or legal actions if they fail to meet the standards set by Better Blend.