What administrative fee does CB Franchising charge a Chocolate Bash franchisee for curing a default?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
to the vendor. If CB Franchising does so, it may impose a reasonable markup or charge for administering the payment program.
- 4.8 Non-Compliance Fee. CB Franchising may charge Franchisee $500 for any instance of non-compliance with the System Standards or this Agreement (other than Franchisee's nonpayment of a fee owed to CB Franchising) which Franchisee fails to cure after 30 days' notice. Thereafter, CB Franchising may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of CB Franchising'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 fee is in addition to all of CB Franchising's other rights and remedies (including default and termination under Section 14.2).
- 4.9 Reimbursement. CB Franchising may (but is never obligated to) pay on Franchisee's behalf any amount that Franchisee owes to a supplier or other third party. If CB Franchising does so or intends to do so, Franchisee shall pay such amount plus a 1
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, if CB Franchising pays an amount that a franchisee owes to a supplier or other third party, the franchisee must pay that amount plus a 10% administrative charge to Chocolate Bash. This payment is due within 15 days after Chocolate Bash invoices the franchisee, accompanied by reasonable documentation.
Additionally, if a Chocolate Bash franchisee fails to comply with the System Standards or the Franchise Agreement (other than nonpayment of a fee) and does not correct it within 30 days of notice, CB Franchising may charge the franchisee $500 for the non-compliance. Following this initial charge, Chocolate Bash may then charge $250 per week until the franchisee corrects the non-compliance.
It is important to note that these fees are in addition to any other rights and remedies Chocolate Bash has, including default and termination rights under Section 14.2 of the Franchise Agreement. This means that a franchisee could face multiple financial consequences for failing to meet the standards set by Chocolate Bash.