Under what conditions can Crown Gold Exchange charge a non-compliance fee?
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 Crown Gold Exchange's 2024 Franchise Disclosure Document, a non-compliance fee may be charged to franchisees under specific conditions related to adherence to system standards and the franchise agreement. Crown Gold Exchange can charge a franchisee $500 for any instance of non-compliance with the System Standards or the Agreement itself. However, this fee is only applicable if the franchisee fails to correct the issue within 30 days after receiving notice of the non-compliance.
Thereafter, if the non-compliance continues beyond the initial 30-day period, Crown Gold Exchange may charge the franchisee $250 per week until the franchisee rectifies the non-compliance. It is important to note that this non-compliance fee does not apply to the non-payment of fees owed to Crown Gold Exchange, which are addressed separately in the agreement.
The FDD specifies that the non-compliance fee is considered a reasonable estimate of Crown Gold Exchange's internal costs associated with addressing the non-compliance, particularly the personnel time involved. It is not considered a penalty or a comprehensive estimate of all potential damages resulting from the franchisee's breach. Furthermore, the non-compliance fee is in addition to any other rights and remedies that Crown Gold Exchange may have, including the possibility of default and termination of the franchise agreement.