What is the weekly fee charged by Desi District for continued non-compliance after the initial cure period?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
after 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, if a franchisee fails to correct an instance of non-compliance with the System Standards or the Franchise Agreement (excluding non-payment of fees) within 30 days of receiving notice, Desi District may charge an initial fee of $500. Furthermore, if the non-compliance continues beyond this initial cure period, Desi District may then charge the franchisee $250 per week until the non-compliance is resolved.
This non-compliance fee is considered a reasonable estimate of Desi District's internal costs related to addressing the non-compliance and is not considered a penalty or a comprehensive estimate of all damages resulting from the franchisee's breach. It's important to note that this fee is in addition to any other rights and remedies that Desi District may pursue, including default and termination of the franchise agreement.
For a prospective Desi District franchisee, this means that maintaining compliance with the franchise agreement and System Standards is crucial to avoid incurring these additional fees. Franchisees should take the initial 30-day notice period seriously and promptly address any identified issues to prevent the ongoing weekly charges. Understanding and adhering to the terms of the franchise agreement is essential for managing costs and maintaining a positive relationship with Desi District.