Under what conditions will the penalties for deficiencies in Royalty or Advertising Fees NOT apply to a Byrider franchisee?

According to the 2025 Byrider Franchise Disclosure Document, Byrider will not impose penalties for deficiencies in royalty or advertising fees under a specific condition. If a deficiency occurs for the first time, Byrider will provide written notice to the franchisee. If the franchisee cures the deficiency within five business days of receiving this notice, the penalties will not apply.

This clause provides a limited grace period for franchisees to correct initial errors or oversights in their payments without incurring penalties. This can be beneficial for new franchisees who may be unfamiliar with the payment processes or experience initial cash flow challenges. It is important to note that this penalty waiver applies only to the first occurrence of a deficiency and requires prompt action by the franchisee to rectify the issue within the specified timeframe.

However, this leniency does not extend to repeated deficiencies. If a franchisee fails to meet their royalty or advertising fee obligations again after the first instance, penalties will apply, as outlined in the franchise agreement. Therefore, Byrider franchisees must ensure consistent and timely payments to avoid penalties beyond the initial grace period. Franchisees should maintain accurate records and establish reliable payment systems to prevent future deficiencies and maintain compliance with the franchise agreement.