When Desi District cures a default, does the reimbursement include allocation of internal costs?

According to Desi District's 2024 Franchise Disclosure Document, if a franchisee defaults on their agreement and Desi District takes action to cure that default, the franchisee is responsible for reimbursing Desi District for all associated costs and expenses. This reimbursement explicitly includes the allocation of any internal costs incurred by Desi District in the process of curing the default.

In addition to covering the costs and expenses, Desi District also charges a 10% administrative fee on top of the reimbursement amount. This fee is added to the total costs, including the allocation of internal costs, to compensate Desi District for the administrative efforts involved in managing and resolving the default situation.

This policy means that franchisees need to be aware that any default on their part could lead to significant financial burdens beyond the original obligation. The inclusion of internal costs and the 10% administrative fee can substantially increase the amount a franchisee must pay to remedy the default. Franchisees should, therefore, strive to maintain compliance with the franchise agreement to avoid such situations.