Besides non-payment of fees, what triggers the non-compliance fee from Chocolate Fish Coffee?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
late Fish Franchising's training program after opening, Chocolate Fish Franchising may charge its then-current training fee. As of the date of this Agreement, the training fee is $350 per day.
- 4.5 Non-Compliance Fee. Chocolate Fish Franchising may charge Franchisee $500 for any instance of non-compliance with the System Standards or this Agreement (other than Franchisee's non-payment of a fee owed to Chocolate Fish Franchising) which Franchisee fails to cure after 30 days' notice. Thereafter, Chocolate Fish Franchising may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Chocolate Fish Franchising's internal cost of personnel time attributable to addressing the non-compliance, and it is not a penalty or estimate of all dama
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, a franchisee may be charged a non-compliance fee of $500 for any instance of non-compliance with the System Standards or the Franchise Agreement, provided it is not related to the non-payment of fees. This fee is applied if the franchisee fails to correct the non-compliance within 30 days after receiving notice from Chocolate Fish Coffee.
After the initial $500 charge, Chocolate Fish Coffee may then charge the franchisee $250 per week until the non-compliance is resolved. The FDD states that these fees are designed to cover Chocolate Fish Coffee's internal personnel costs associated with addressing the non-compliance and are not considered a penalty or an estimate of all potential damages resulting from the franchisee's breach.
It's important to note that the non-compliance fee is in addition to any other rights and remedies Chocolate Fish Coffee may have, including default and termination of the Franchise Agreement. This means that a franchisee could face both financial penalties and the loss of their franchise for failing to adhere to the System Standards or the Franchise Agreement, outside of simply failing to pay required fees.