Under what conditions is a Crave Cookies franchisee required to pay costs of collection?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Costs of collection | Our actual costs | As incurred | Payable if we incur costs (including reasonable attorney fees) in attempting to collect amounts you owe to us. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, a franchisee is required to cover costs of collection if Crave Cookies incurs expenses while trying to collect outstanding payments from the franchisee. These costs encompass Crave Cookies's actual expenses, including reasonable attorney fees. This means that if a Crave Cookies franchisee fails to pay royalties, marketing fund contributions, or any other fees owed to the company, they may be responsible for not only the original unpaid amount but also any legal or collection-related costs that Crave Cookies incurs in the process of recovering the debt.
This provision is fairly standard in franchising, as it protects the franchisor from absorbing losses due to franchisees' non-payment. It also incentivizes franchisees to manage their finances responsibly and pay all dues on time to avoid additional charges. The franchisee should ensure they have sufficient capital and a solid business plan to minimize the risk of falling behind on payments and incurring these additional costs.
Prospective Crave Cookies franchisees should be aware of this potential financial burden and factor it into their budget and risk assessment. It is important to maintain open communication with Crave Cookies regarding any financial difficulties to explore possible solutions before collection efforts are initiated. Understanding the terms and conditions related to payments and potential collection costs is crucial for a successful and financially stable franchise operation.