What is included in the 'costs of collection' that a Desi District franchisee might have to pay?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Costs of collection | Our actual costs | As incurred | Payable if we incur costs (including reasonable attorney fees) in attempting to collect amounts you owe to us. |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, if a franchisee fails to pay amounts owed to the company, they are responsible for covering the costs Desi District incurs while attempting to collect the debt. These 'costs of collection' include Desi District's actual costs, including reasonable attorney fees. These costs are payable as they are incurred.
This means that if Desi District has to hire a lawyer or take other actions to recover unpaid fees or other amounts owed, the franchisee will be responsible for those legal and administrative expenses in addition to the original debt. This could potentially add a significant financial burden on the franchisee, especially if the collection process becomes protracted or involves litigation.
It is important for prospective Desi District franchisees to understand this potential liability and ensure they have a plan for managing their finances and meeting their payment obligations to avoid incurring these additional costs. Franchisees should maintain open communication with Desi District regarding any financial difficulties to explore potential solutions and avoid escalating the situation to the point of collection efforts.