Is the non-compliance fee charged by Care Plus Medical Ucc considered a penalty?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
are Plus Medical UCC may charge its thencurrent training fee. As of the date of this Agreement, the training fee is $450 per day.
- 4.5 Non-Compliance Fee. Care Plus Medical UCC 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 Care Plus Medical UCC) which Franchisee fails to cure after 30 days' notice. Thereafter, Care Plus Medical UCC may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Care Plus Medical UCC'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 fe
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, the non-compliance fee is not considered a penalty. Care Plus Medical Ucc may charge a franchisee $500 for each instance of non-compliance with the System Standards or the Franchise Agreement, provided the franchisee fails to correct the issue after receiving 30 days' notice. After this initial fee, Care Plus Medical Ucc can charge $250 per week until the franchisee rectifies the non-compliance.
The FDD specifies that this fee is designed to cover Care Plus Medical Ucc's internal costs related to addressing the non-compliance. It is considered a reasonable estimate of personnel time rather than a penalty or a comprehensive calculation of all damages resulting from the franchisee's breach.
This non-compliance fee is in addition to any other rights and remedies that Care Plus Medical Ucc has, including the ability to declare a default and terminate the agreement as described in Section 14.2 of the agreement. Therefore, franchisees should be aware that non-compliance can lead to multiple financial repercussions beyond just the initial fee.