What is the grace period to cure non-compliance before a Chocolate Bash franchisee is charged a fee?
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
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, a franchisee has 30 days to correct any non-compliance issues before incurring a fee. This grace period applies to non-compliance with System Standards or the Franchise Agreement, excluding non-payment of fees owed to Chocolate Bash.
If the franchisee fails to resolve the non-compliance within the initial 30-day notice period, Chocolate Bash may impose a fee of $500. Furthermore, Chocolate Bash can charge an additional $250 per week until the franchisee rectifies the non-compliance. This fee is designed to cover Chocolate Bash's internal costs related to addressing the non-compliance and is not considered a penalty or a comprehensive estimate of all potential damages resulting from the breach.
It's important to note that this non-compliance fee is separate from any other rights and remedies Chocolate Bash has, including default and termination rights as outlined in Section 14.2 of the Franchise Agreement. This means that Chocolate Bash can pursue other actions, such as terminating the agreement, in addition to charging the non-compliance fee. Prospective franchisees should understand these terms and ensure they can meet the System Standards and contractual obligations to avoid these fees and potential further actions from Chocolate Bash.