What is the weekly non-compliance fee for a Chocolate Bash franchisee after the initial 30-day notice 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 for failing to adhere to System Standards or the Franchise Agreement. Chocolate Bash will provide an initial 30-day notice to allow the franchisee to correct the issue.
After the 30-day notice period, if the franchisee has not corrected the non-compliance, Chocolate Bash may charge a non-compliance fee of $250 per week. This weekly fee continues until the franchisee rectifies the non-compliance.
The FDD states that this fee is designed to cover Chocolate Bash's internal costs related to addressing the non-compliance and is not considered a penalty. This fee is in addition to any other legal remedies Chocolate Bash may pursue, including default or termination of the franchise agreement.
Prospective franchisees should understand that maintaining compliance with Chocolate Bash's standards is crucial to avoid these ongoing weekly fees, which can accumulate quickly and impact profitability.