Besides non-payment of fees, what other instances of non-compliance with the System Standards or the Agreement can result in a non-compliance fee from Desi District Franchise Group?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
after opening, Desi District Franchise Group 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. Desi District Franchise Group 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 Desi District Franchise Group) which Franchisee fails to cure after 30 days' notice. Thereafter, Desi District Franchise Group may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Desi District Franchise Group'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. Th
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees may be charged a non-compliance fee for failing to adhere to System Standards or the Franchise Agreement, provided the issue is not related to non-payment of fees. Desi District may charge $500 for any instance of non-compliance that remains uncured after 30 days' notice. If the non-compliance continues beyond this initial period, Desi District can then charge $250 per week until the franchisee rectifies the issue.
Desi District specifies that these fees are designed to cover the franchisor's internal costs associated with addressing the non-compliance, particularly the personnel time involved. The document clarifies that these fees are not considered a penalty, nor do they represent a comprehensive estimate of all potential damages resulting from the franchisee's breach.
It is important to note that the non-compliance fee is in addition to any other legal rights and remedies Desi District may pursue, including actions for default and termination of the franchise agreement. This means that franchisees could face multiple repercussions for a single instance of non-compliance, including financial penalties and potential loss of their franchise.