What is the initial non-compliance fee that Crown Gold Exchange may charge?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
, Crown Gold Franchising may charge its then-current training fee. As of the date of this Agreement, the training fee is $250 per day.
- 4.4 Non-Compliance Fee. Crown Gold 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 Crown Gold Franchising) which Franchisee fails to cure after 30 days' notice. Thereafter, Crown Gold Franchising may charge Franchisee $250 per week until
Franchisee ceases such non-compliance. This fee is a reasonable estimate of Crown Gold 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-complianc
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Crown Gold Exchange may charge an initial non-compliance fee of $500 for any failure to comply with the System Standards or the Franchise Agreement. This fee applies to instances of non-compliance other than non-payment of fees owed to Crown Gold Exchange.
However, this $500 fee is only charged if the franchisee fails to correct the non-compliance within 30 days after receiving notice from Crown Gold Exchange. If the non-compliance continues beyond the initial 30-day period, Crown Gold Exchange may then charge an additional $250 per week until the franchisee corrects the issue.
The FDD specifies that these fees are considered a reasonable estimate of Crown Gold Exchange's internal costs related to addressing the non-compliance and are not intended as a penalty or a comprehensive estimate of all potential damages resulting from the franchisee's breach. These non-compliance fees are in addition to any other legal rights and remedies that Crown Gold Exchange may have, including the ability to declare a default and terminate the Franchise Agreement.
Prospective franchisees should understand that maintaining compliance with Crown Gold Exchange's standards is crucial to avoid these fees. Franchisees should also be aware that non-compliance can lead to further financial penalties and potential termination of the franchise agreement.