When Bombs Away Franchising cures a default, does the reimbursement include allocation of internal costs?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.3 Bombs Away Franchising's Right to Cure. 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 defaults on any provision of the Franchise Agreement, Bombs Away Franchising has the option to take action to cure the default on behalf of the franchisee, without incurring any liability.
If Bombs Away Franchising chooses to cure a default, the franchisee is required to reimburse Bombs Away Franchising for all costs and expenses associated with the action. This reimbursement includes the allocation of any internal costs incurred by Bombs Away Franchising.
In addition to covering costs and expenses, Bombs Away Franchising will also charge the franchisee a 10% administrative fee on top of the reimbursement amount. This means that the franchisee will be responsible for the direct costs of curing the default, plus a 10% markup to cover Bombs Away Franchising's administrative overhead.