What costs and expenses is a defaulting Devon Creek franchisee responsible for paying to the franchisor?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
ligation which is satisfactory to Franchisor, within ten (10) days after termination or expiration of this Agreement;
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment,
- fixtures, and inventory or other business assets owned by Franchisee at the time of default;
- 18.1.5 pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
- 18.1.6 immediately deliver at Franchisee's sole cost and expense, to Franchisor the Manual and all records, files, instructions, correspondence, invoices, agreements, all confidential, proprietary and copyrighted material and all other materials related to operation of the Franchised Business, including but not limited to customer lists and records, (all of which are acknowledged to be Franchisor's property), delete all electronic copies and retain no copy or record of any of the foregoing, except Franchisee's copy of this Agreement and of any correspondence between the parties and any other documents that Franchisee reasonably needs for compliance with any provision of law;
- 18.1.7. in the event this Agreement is terminated due to Franchisee's default, pay Franchisor a lump sum payment (as liquidated damages and not as a penalty) in an amount equal to: (a) the average weekly Royalty Fee and Brand Fund contribution payable by Franchisee over the twelve (12) month period immediately prior to the date of termination (or such shorter time period if the Franchised Business has been open less than twelve (12) months);
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, a defaulting franchisee is responsible for specific costs and expenses to Devon Creek. These include all sums owed to Devon Creek and its affiliates, encompassing damages, costs, expenses, and reasonable attorneys' fees incurred by Devon Creek due to the franchisee's default. This payment obligation creates a lien in favor of Devon Creek against the franchisee's personal property, furnishings, equipment, fixtures, inventory, and other business assets at the time of default.
Furthermore, the franchisee must pay all damages, costs, and expenses, including reasonable attorneys' fees, that Devon Creek incurs while seeking remedies for any violation of the Franchise Agreement. This extends to obtaining injunctive or other relief to enforce any provisions of the agreement that survive its termination.
In the event of a default, Devon Creek may choose to cure the default on the franchisee's behalf, and the franchisee must immediately pay Devon Creek the costs incurred upon demand. If Devon Creek exercises authority over the Franchise Business during an interim management period, the franchisee must pay Devon Creek the greater of 10% of Gross Revenue earned during that period or $500 per day, along with any travel, lodging, meals, and other expenses reasonably incurred by Devon Creek, until the default is resolved and the franchisee complies with the agreement. These financial responsibilities underscore the importance of adhering to the Franchise Agreement to avoid potential financial burdens in case of default.