What costs are included in Chocolate Bash's 'out-of-pocket costs' when curing my non-compliance?
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 is non-compliant with the franchise agreement, Chocolate Bash may take action to correct the non-compliance on the franchisee's behalf. In these instances, Chocolate Bash will bill the franchisee for their out-of-pocket costs and internal cost allocation, in addition to a 10% administrative fee.
For example, if a Chocolate Bash franchisee fails to maintain the required insurance, Chocolate Bash may purchase the insurance coverage themselves to ensure compliance. The franchisee would then be responsible for reimbursing Chocolate Bash for the cost of the insurance, plus an additional 10% to cover administrative overhead.
This policy ensures that Chocolate Bash franchisees maintain brand standards and comply with all requirements. While it protects the Chocolate Bash brand, it also means franchisees could face unexpected expenses if they fail to meet their obligations under the franchise agreement.