What is the amount of the fee if Chocolate Bash purchases insurance on my behalf?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Our out-of-pocket | When billed | We may cure your non-compliance on | |
| costs and internal | your behalf (for example, if you do not | ||
| cost allocation, plus | have required insurance, we may purchase | ||
| 10% | insurance for you), and you will owe our | ||
| costs plus a 10% administrative fee. |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, if a franchisee does not have the required insurance, Chocolate Bash may purchase insurance on their behalf. In this case, the franchisee will owe Chocolate Bash their out-of-pocket costs and internal cost allocation, plus a 10% administrative fee.
This means that franchisees must maintain the required insurance coverage to avoid Chocolate Bash stepping in and purchasing it for them. While this ensures the franchise remains compliant, it could result in higher costs for the franchisee. The 10% administrative fee adds an extra expense on top of the actual insurance costs.
Prospective franchisees should clarify with Chocolate Bash what the typical out-of-pocket insurance costs are and what factors go into the internal cost allocation. Understanding these potential costs can help franchisees budget appropriately and ensure they maintain their own insurance coverage to avoid the additional 10% fee.