Can a Desi District franchisee offset or deduct payments owed to Desi District Franchise Group?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- (g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Desi District Franchise Group any fees or amounts described in this Agreement are not dependent on Desi District Franchise Group's performance and are independent covenants by Franchisee. Franchisee shall make all such payments without offset or deduction.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee's obligation to pay fees or amounts owed to Desi District Franchise Group is independent of Desi District's performance. This means that the franchisee must make all payments without any offset or deduction.
This clause protects Desi District from franchisees withholding payments due to disputes or perceived failures in support from the franchisor. It ensures a consistent revenue stream for Desi District, regardless of individual franchisee satisfaction or performance.
In practical terms, a Desi District franchisee cannot legally reduce or delay royalty payments or other fees, even if they believe Desi District has not fulfilled its obligations. Failure to make timely and full payments could result in penalties, interest charges, and potential legal action by Desi District Franchise Group.