Is non-payment of fees owed to Bombs Away Franchising subject to the non-compliance fee?
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-compliance fee is in addition to all of Bombs Away Franchising's other rights and remedies (including default and termination under Section 14.2).
- 4.6 Reimbursement. Bombs Away Franchising may (but is never obligated to) pay on Franchisee's behalf any amount that Franchisee owes to a supplier or other third party. If Bombs Away Franchising does so or intends to do so, Franchisee shall pay such amount plus a 10%
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, non-payment of fees is explicitly excluded from being subject to the non-compliance fee. Instead, non-payment of fees is addressed separately under termination terms and late fee policies.
The franchise agreement outlines specific financial obligations, including royalty fees and marketing fund contributions. If a Bombs Away franchisee fails to make payments on time, they will incur a $100 late fee, plus interest on the unpaid amount at a rate of 18% per year (or the highest rate allowed by law). Additionally, Bombs Away may charge $30 for any payment returned due to insufficient funds.
Bombs Away retains the right to terminate the franchise agreement if a franchisee fails to make any payment when due and does not cure the non-payment within 10 days after receiving notice of the breach. This demonstrates that non-payment is treated as a serious breach of contract, leading to potential termination rather than just the non-compliance fee.