What is the weekly non-compliance fee that Chocolate Bash may charge after the initial 30-day cure period?
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, franchisees may be subject to a non-compliance fee if they fail to adhere to the System Standards or the Franchise Agreement. Chocolate Bash will initially provide a 30-day notice to cure the non-compliance.
If the franchisee fails to correct the issue within this 30-day period, Chocolate Bash may charge a non-compliance fee of $500 for the initial instance of non-compliance. Following this initial charge, if the non-compliance continues, Chocolate Bash has the right to charge the franchisee $250 per week until the franchisee rectifies the non-compliance.
The FDD states that this weekly 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. This fee is in addition to any other legal remedies Chocolate Bash may pursue, including default or termination of the Franchise Agreement.