When are Costs and Attorney's Fees payable to Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
| - | |||
|---|---|---|---|
| Audit Expenses | Cost of Audit Fees plus interest at 18% per annum (1.5% per month) up to the maximum interest rate allowed by law. | Ten days after receipt of audit report. | Payable to us only if you understate Gross Revenues by 2% or more. We expect the cost to be between $3,500-$6,500 unless your financial records are not well kept. |
| Costs and Attorney's | Will vary under circumstances. | As Incurred. | Payable as incurred by us in obtaining injunctive relief or the enforcement of any item of the Franchise Agreement. |
| Fees |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, costs and attorney's fees are payable 'as incurred.' This means that a franchisee must pay these fees to Burros Fries as Burros Fries incurs them.
The fees will vary depending on the circumstances and are related to Burros Fries obtaining injunctive relief or enforcing any part of the Franchise Agreement. Injunctive relief typically involves a court order requiring the franchisee to stop a specific action that violates the agreement. Enforcement actions can include legal steps to ensure the franchisee complies with all contractual obligations.
For a prospective Burros Fries franchisee, this means that if they violate the Franchise Agreement in a way that leads Burros Fries to take legal action, the franchisee will be responsible for covering Burros Fries's legal costs as those costs accumulate. This differs from some franchise agreements where legal fees might only be assessed at the conclusion of a case. The 'as incurred' term means that Burros Fries could demand payment at any point during legal proceedings, which could create cash flow challenges for the franchisee.
It is important for a potential Burros Fries franchisee to fully understand the terms of the Franchise Agreement and to operate their business in compliance with those terms to avoid incurring these potentially significant and ongoing legal costs. They should also budget for potential legal expenses and maintain open communication with Burros Fries to address any concerns proactively.