What additional costs must a C3 Wellness Spa Franchisee pay in connection with Operations Violations?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
violation of any term, provision, and/or operational requirement as set forth in this Article 7 (an "Operations Violation"), within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor an operations non-compliance fee (the "Operations Non-Compliance Fee") in the amount of: (a) $1,000 for each and every instance / event related to an Operations Violation involving the sale of services and/or
products that are not Approved Spa Products and Services and/or authorized Spa Facility and Management Services; (b) $1,000 for each and every instance / event related to an Operations Violation involving the failure to exclusively use System Supplies, and/or Franchisor designated suppliers; and (c) $1,000 for all other Operations Violation. Additionally, in each of the foregoing instances, within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor all costs and expenses incurred by Franchisor in connection with any inspections, audits, and/or re-inspections directed and/or undertaken by Franchisor for the purpose, as determined by Franchisor in Franchisor's Reasonable Business Judgment, of determining whether or not Franchisee's Operations Violation has been cured in accordance with Franchisor's stan
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, franchisees may incur additional costs for operations violations. Specifically, C3 Wellness Spa franchisees will be charged $1,000 for each instance of offering non-approved spa products or unauthorized services. A further penalty of $1,000 is levied for each violation related to the failure to exclusively use System Supplies or Franchisor-designated suppliers. A general operations violation also incurs a $1,000 charge.
In addition to these fixed penalties, C3 Wellness Spa franchisees are responsible for covering all costs and expenses that the Franchisor incurs for inspections, audits, and re-inspections. These inspections are conducted to determine if the franchisee has corrected the operations violation according to C3 Wellness Spa's standards. These costs must be paid within 14 days of the invoice date from C3 Wellness Spa.
It is important to note that these financial penalties and inspection costs do not represent C3 Wellness Spa's consent to operational violations, and C3 Wellness Spa retains all rights and remedies as outlined in Article 16 of the agreement. All rights and remedies available to C3 Wellness Spa are cumulative, meaning they can be exercised together.