When is the Non-compliance fee due for a Desi District franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Non-compliance fee | $500 | On demand | We may charge you $500 if your business is not in compliance with our system specifications or the franchise agreement and you fail to correct the non-compliance after 30 days' notice. Thereafter, we may charge you $250 per week until you correct such non-compliance. |
| Non-compliance cure costs and fee | Our out-of-pocket costs and internal cost allocation, plus 10% | When billed | We may cure your non-compliance on your behalf (for example, if you do not have required insurance, we may purchase insurance for you), and you will owe our costs plus a 10% administrative fee. |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, there are two types of non-compliance fees. The first, a $500 Non-compliance fee, is due 'On demand' if the franchisee's business is not in compliance with Desi District's system specifications or the franchise agreement, and the franchisee fails to correct the non-compliance after 30 days' notice. After this initial fee, Desi District may charge the franchisee $250 per week until the non-compliance is corrected.
There is also a 'Non-compliance cure costs and fee'. This fee is due 'When billed'. Desi District may cure the franchisee's non-compliance on their behalf (for example, if the franchisee does not have required insurance, Desi District may purchase insurance for them). The franchisee will owe Desi District their costs plus a 10% administrative fee.
These fees highlight the importance of adhering to Desi District's standards and agreements. Franchisees should ensure they understand and comply with all system specifications and contractual obligations to avoid these additional costs. The 'Non-compliance cure costs and fee' provision also indicates that Desi District may take a proactive approach to ensuring compliance, but at the franchisee's expense.