How long does a Desi District franchisee have to cure non-compliance before incurring a non-compliance fee?
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, a franchisee has 30 days to cure non-compliance with System Standards or the Franchise Agreement before incurring a non-compliance fee. This cure period does not apply to the non-payment of fees owed to Desi District. After this 30-day notice period, Desi District may charge the franchisee $500 for the initial instance of non-compliance.
If the franchisee fails to correct the non-compliance after the initial 30-day cure period and the subsequent $500 charge, Desi District may impose an additional fee of $250 per week until the franchisee rectifies the issue. This weekly fee continues as long as the franchisee remains non-compliant.
The FDD specifies 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 a comprehensive estimate of all potential damages resulting from the franchisee's breach. Furthermore, the non-compliance fee is in addition to any other legal rights and remedies that Desi District may pursue, including default and termination of the franchise agreement.