What are the requirements for a Bombs Away franchisee regarding compliance with lease terms and rent payments?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
dministrative charge to Bombs Away Franchising within 15 days after invoice by Bombs Away Franchising accompanied by reasonable documentation.
4.7 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee, Marketing Fund Contribution, and any other amounts owed to Bombs Away Franchising by pre-authorized bank draft or in such other manner as Bombs Away Franchising may require. Franchisee shall comply with Bombs Away Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report monthly Gross Sales to Bombs Away Franchising by the 2nd day of the following month. If Franchisee fails to report monthly Gross Sales, then Bombs Away Franchising may withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last Gross Sales reported to Bombs Away Franchising, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Bombs Away Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Bombs Away Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed by law).
- (e) Costs of Collection. Franchisee shall repay any costs incurred by Bombs Away Franchising (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (f) Application. Bombs Away Franchising may apply any payment received from Franchisee to any obligation and in any order as Bombs Away Franchising may determine, regardless of any designation by Franchisee.
(g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Bombs Away Franchising any fees or amounts described in this Agreement are not dependent on Bombs
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the Bombs Away franchise agreement does not explicitly detail requirements for compliance with lease terms. The document focuses more on the franchisee's financial obligations to the franchisor, Bombs Away Franchising, rather than the franchisee's obligations to third-party landlords.
However, the FDD does outline payment terms to Bombs Away Franchising. Franchisees must pay Royalty Fees, Marketing Fund Contributions, and any other amounts owed via pre-authorized bank draft or another method Bombs Away Franchising requires. Franchisees must report monthly Gross Sales by the 2nd day of the following month. Failure to report sales allows Bombs Away Franchising to estimate fees at 125% of the last reported Gross Sales, with a later reconciliation.
Late payments incur a $100 late fee plus interest at 18% per year (or the maximum legal rate). There is also a $30 fee for returned payments due to insufficient funds (or the maximum legal amount). Bombs Away Franchising can recover collection costs, including reasonable attorney fees, for overdue payments. Payments received may be applied to any obligation in any order determined by Bombs Away Franchising, regardless of the franchisee's designation. The franchisee's payment obligations are independent of Bombs Away Franchising's performance, and no offsets or deductions are allowed.