What costs are included in the Reimbursement of Cost and Expenses for Non-compliance fee for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
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| -J P | Amount | Due Date | Remarks |
|---|---|---|---|
| Late Payment Fee | $50 per day | As incurred | If you fail to pay us the Continuing Royalty Fee, Brand Fund Fee, or if you fail to submit your Gross Revenue report when due, we may charge you $50 per day for each late submission in addition to interest charges explained below. |
| Non-sufficient Funds Fee | $250 | As incurred | If your check is returned or an electronic funds transfer from your bank account is denied for insufficient funds, for each occurrence we may charge you a Non-sufficient Funds Fee. |
| Reimbursement of Cost | Actual costs and expenses | As incurred. | See footnote 10. |
| and Expenses for Non- | |||
| compliance | |||
| Liquidated Damages | You must pay us the average monthly Royalty Fee and Brand Fund Contribution payable by you for the 12 months prior to your default multiplied by the lesser of (i) 36 months, or (ii) the number of months remaining in the term of your Franchise Agreement. | As incurred. | Payable to us in the event your Franchise Agreement is terminated due to your default. |
| Examination of Books and Records | Actual cost of examination plus related expenses. | As incurred. | We have the right under the Franchise Agreement to examine your books, records and tax returns pertaining to the Franchised Business. If an examination reveals that you have understated any Gross Revenue report by two percent (2%) or more, you must pay to us the cost of the audit and all travel and related expenses, in addition to repaying monies owed and interest o |
Source: Item 6 — OTHER FEES (FDD pages 8–16)
What This Means (2024 FDD)
According to the 2024 Devon Creek Franchise Disclosure Document, the Reimbursement of Cost and Expenses for Non-compliance fee covers the actual costs and expenses incurred by Devon Creek due to the franchisee's non-compliance. This fee is due as incurred, meaning it becomes payable when Devon Creek incurs these costs. Footnote 10 provides additional context, though the specific details of Footnote 10 are not included in this excerpt.
For a prospective Devon Creek franchisee, this means that if they fail to comply with the terms of the Franchise Agreement, they will be responsible for covering Devon Creek's costs and expenses resulting from that non-compliance. The exact amount will vary depending on the nature and extent of the non-compliance and the resulting costs incurred by Devon Creek to rectify the situation or enforce compliance.
It is important for a potential Devon Creek franchisee to understand what constitutes non-compliance under the Franchise Agreement and to take steps to ensure they adhere to all requirements. This will help avoid incurring these potentially significant reimbursement costs. Franchisees should carefully review the Franchise Agreement and seek clarification from Devon Creek on any points they do not fully understand. Because the details of Footnote 10 are not included, a prospective franchisee should ask Devon Creek for a full explanation of what this footnote covers.