Under what circumstances might Desi District Franchise Group charge 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, the Desi District Franchise Group may charge a franchisee a non-compliance fee under specific circumstances related to adherence to System Standards and the Franchise Agreement.
The non-compliance fee is $500 for each instance where a franchisee fails to comply with the System Standards or the Franchise Agreement. However, this fee is not applied immediately. Desi District must first provide the franchisee with a 30-day notice to correct the non-compliance. If the franchisee fails to rectify the issue within this 30-day period, the $500 fee is applied.
Furthermore, if the non-compliance continues beyond the initial fee assessment, Desi District can charge an additional $250 per week until the franchisee resolves the non-compliance. It is important to note that this fee is intended to cover Desi District's internal costs related to addressing the non-compliance and is not considered a penalty or a comprehensive estimate of all potential damages resulting from the breach. This non-compliance fee is separate from, and in addition to, any other rights and remedies Desi District may pursue, including default and termination of the agreement.