What is the initial non-compliance fee that Desi District Franchise Group may charge?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
fter 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, the company may charge a franchisee $500 for any instance of non-compliance with the System Standards or the Franchise Agreement. This fee applies if the franchisee fails to correct the non-compliance within 30 days after receiving notice.
After the initial $500 charge, Desi District may then charge the franchisee $250 per week until the non-compliance is resolved. The FDD states that these fees are designed to cover Desi District's internal costs related to addressing the non-compliance and are not considered a penalty or an estimate of all potential damages resulting from the breach.
It's important to note that this non-compliance fee is separate from, and in addition to, any other rights and remedies that Desi District has, including the possibility of default and termination of the franchise agreement. This means that franchisees must promptly address any compliance issues to avoid incurring these fees and potentially more severe consequences.