What is the initial non-compliance fee that Bombs Away Franchising may charge a franchisee for violating System Standards or the Agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
may charge its then-current training fee. As of the date of this Agreement, the training fee is $350 per day.
- 4.5 Non-Compliance Fee. Bombs Away Franchising may charge Franchisee $500 for any instance of non-compliance with the System Standards or this Agreement (other than Franchisee's non-payment of a fee owed to Bombs Away Franchising) which Franchisee fails to cure after 30 days' notice. Thereafter, Bombs Away Franchising may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Bombs Away Franchising's internal cost of personnel time attributable to addressing the non-compliance, and it is not a penalty or estimate of all damages arising from Franchisee's breach. The non-compl
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 fails to correct an instance of non-compliance with the System Standards or the Franchise Agreement (excluding non-payment of fees) within 30 days of receiving notice, Bombs Away Franchising may charge an initial non-compliance fee of $500.
This fee is intended to cover Bombs Away's internal costs related to addressing the non-compliance and is not considered a penalty or a comprehensive estimate of all potential damages resulting from the breach. It's important to note that this non-compliance fee is in addition to any other rights and remedies Bombs Away Franchising may have, including the possibility of default and termination of the franchise agreement.
After the initial $500 fee, Bombs Away may also charge $250 per week until the franchisee rectifies the non-compliance. This escalating fee structure is designed to incentivize franchisees to promptly address and resolve any issues of non-compliance to avoid accumulating further charges. Franchisees should be aware of the System Standards and Agreement terms to avoid such fees.
Prospective Bombs Away franchisees should carefully review the System Standards and the franchise agreement to understand what constitutes non-compliance and the steps required to rectify any issues. Understanding these requirements can help franchisees avoid these fees and maintain a positive relationship with Bombs Away Franchising.