Under what conditions will Desi District charge a Non-compliance fee?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Market Cooperative Contribution | As determined by co-op. Currently, none. | Weekly, on Tuesday | We have the right to establish local or regional advertising cooperatives. The maximum contribution that a co-op may require is 5% of gross sales. Any location owned by us or any affiliate will have the same voting rights as our franchisees. Dues will be imposed by a majority vote and will not be less than 1% of gross sales. If any location owned by us or any affiliates have a majority vote, the maximum fees imposed will not exceed 3% of gross sales. |
| Local Marketing/Required Spending | up to 2% of your gross sales | Monthly | You may only use promotional materials you have purchased from us or that we have provided to you. |
| Replacement / Additional Training fee | Currently, $350 per day | Prior to attending training | If you send a manager or other employee to our training program after you open, we will charge our then-current training fee. |
| Third party vendors | Pass-through of costs, plus reasonable administrative charge. Currently, none. | Varies | We have the right to require franchisees to use third-party vendors and suppliers that we designate. Examples can include computer support vendors, mystery shopping, and customer feedback systems. The vendors and suppliers may bill franchisees directly, or we have the right to collect payment for these vendors together with a reasonable markup or charge for administering the payment program. |
| Software subscription | Currently, $800- $2,000 per month for TOAST POS; $100 per month for Block POS | Monthly | We require you to use certain software as described in Item 11. You pay subscription fees directly to the software supplier, and not to us. |
| 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 s |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee may be charged a non-compliance fee under specific circumstances. Desi District may impose a $500 fee if a franchisee's business fails to adhere to the system specifications or the franchise agreement.
This fee is only applied if the franchisee does not correct the issue within 30 days after receiving notice of non-compliance. If the non-compliance continues beyond the initial 30-day period, Desi District may then charge an additional $250 per week until the franchisee rectifies the situation.
This policy encourages franchisees to promptly address any operational or contractual issues to avoid incurring additional costs. It also ensures that all Desi District locations maintain a consistent standard of quality and adherence to brand guidelines, which is crucial for the overall success and reputation of the franchise system.