What must a Bombs Away franchisee do if Bombs Away Franchising cures a default on their behalf?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee breaches or defaults under any provision of this Agreement, Bombs Away Franchising may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee.
Franchisee shall reimburse Bombs Away Franchising for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee breaches their agreement, Bombs Away Franchising has the option, but not the obligation, to take action to correct the default on behalf of the franchisee. If Bombs Away Franchising does take such action, the franchisee is required to reimburse Bombs Away Franchising for all costs and expenses incurred. This reimbursement includes any internal costs that Bombs Away Franchising allocates to the cure.
In addition to covering the direct costs and expenses, the franchisee must also pay Bombs Away Franchising an administrative fee. This fee is calculated as 10% of the total costs and expenses that Bombs Away Franchising incurred while curing the default.
This clause in the franchise agreement means that franchisees could face unexpected expenses if they fail to meet their contractual obligations and Bombs Away Franchising steps in to rectify the situation. It is important for prospective franchisees to understand that while Bombs Away Franchising may assist in curing a default, this assistance comes at a cost to the franchisee, potentially adding a significant financial burden on top of addressing the initial default.