Besides the Operations Non-Compliance Fee, what other costs is a Casiola franchisee responsible for paying in the event of an Operations Violation?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager.
- (4) Franchisee shall, at all times, maintain sufficient working capital to fulfill its obligations under this Agreement.
7.J. REMEDIES FOR NON-COMPLIANCE WITH OPERATIONAL STANDARDS
In addition to all other rights afforded to Franchisor under this Agreement, in connection with any, each, and every 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 Services and Products; (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) $500 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 standards and specifications. The foregoing does not constitute Franchisor's consent to and/or acquiescence to Operations Violations.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, in addition to the Operations Non-Compliance Fee, a franchisee is responsible for covering all costs and expenses incurred by Casiola for inspections, audits, and re-inspections related to determining if the Operations Violation has been corrected.
The Operations Non-Compliance Fee itself varies depending on the nature of the violation. For selling non-approved services or products, or for failing to exclusively use System Supplies or designated suppliers, the fee is $1,000 per instance. For all other Operations Violations, the fee is $500. These fees, along with the costs of inspections and audits, are due within 14 days of Casiola's invoice.
This means that if a Casiola franchisee violates operational standards, they will not only be charged a non-compliance fee, but also any expenses Casiola incurs to assess and verify that the violation has been resolved. This could potentially include travel costs, personnel costs, and other related expenses for the inspection.
Casiola retains all other rights and remedies as set forth in the Agreement, and all rights and remedies of Casiola are cumulative. This means that these fees and costs do not limit Casiola's ability to pursue other legal or contractual remedies for the Operations Violation.