If Desi District Franchise Group cures a default, must the franchisee reimburse them?

According to Desi District's 2024 Franchise Disclosure Document, if Desi District pays an amount that a franchisee owes to a supplier or other third party, the franchisee must reimburse Desi District. The franchisee is required to pay the amount plus a 10% administrative charge within 15 days of receiving an invoice from Desi District, which will include reasonable documentation.

This means that if a Desi District franchisee fails to pay a supplier, Desi District has the option to cover the payment. If Desi District chooses to do so, the franchisee is then obligated to reimburse Desi District for the original amount plus an additional 10% as an administrative fee. This reimbursement must be made within 15 days of receiving the invoice.

This policy could protect suppliers and maintain the supply chain for the Desi District franchise system. However, it also places an additional financial burden on the franchisee, who must not only cover the original debt but also pay an extra 10% charge. Franchisees should be aware of this potential cost and ensure they manage their finances carefully to avoid needing Desi District to make payments on their behalf.