How is the fee calculated if I breach the Bombs Away franchise agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Currently $600, plus | On demand | Payable only if we conduct an in-person | |
| our out-of-pocket | evaluation of your business because of a | ||
| costs | governmental report, customer complaint | ||
| or other customer feedback, or your | |||
| default or non-compliance with any | |||
| system specification. | |||
| We may cure your non-compliance on | |||
| your behalf (for example, if you do not | |||
| have required insurance, we may purchase | |||
| insurance for you), and you will owe our | |||
| costs plus a 10% administrative fee. | |||
| $7,500 plus any | Payable if you sell your business. | ||
| broker fees and other | |||
| out-of-pocket costs | |||
| we incur | |||
| An amount equal to | |||
| royalty fees and | |||
| marketing fund | |||
| contributions for the | |||
| lesser of (i) 2 years | |||
| or (ii) the remaining | |||
| weeks of the | |||
| franchise term. | |||
| Our costs and losses | You must indemnify and defend (with | ||
| from any legal | counsel reasonably acceptable to us) us | ||
| action related to the | and our affiliates against all losses in any | ||
| operation of your | action by or against us related to, or | ||
| franchise | alleged to arise out of, the operation of | ||
| your franchise (unless caused by our | |||
| misconduct or negligence). |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if you breach the franchise agreement, the fees can vary. Bombs Away may conduct an in-person evaluation of your business due to non-compliance, a governmental report, or a customer complaint, costing you $600 plus out-of-pocket expenses. Additionally, Bombs Away may cure your non-compliance on your behalf, such as purchasing required insurance, and you will owe their costs plus a 10% administrative fee.
If the breach leads to the termination of the franchise agreement, Bombs Away can charge an amount equal to the royalty fees and marketing fund contributions for the lesser of two years or the remaining weeks of the franchise term. Furthermore, you may be responsible for Bombs Away's attorney fees, court costs, and other expenses if they are the prevailing party in a legal proceeding.
Bombs Away also specifies that if your business is not in compliance with their system specifications or the franchise agreement and you fail to correct it after 30 days’ notice, they may charge you $500. Following this initial charge, they may charge you $250 per week until you correct the non-compliance. These fees highlight the importance of adhering to the franchise agreement and system standards to avoid incurring additional costs.