To whom is the Interim Management Fee for a Devon Creek franchise payable?

According to Devon Creek's 2024 Franchise Disclosure Document, the Interim Management Fee is payable to the franchisor. This fee may be imposed if Devon Creek provides on-site management of the franchisee's outlet under certain circumstances. These circumstances include the franchisee's death or disability, default of the Franchise Agreement, or absence of a qualified general manager. The franchisor has sole discretion in determining when to provide interim management.

The Interim Management Fee is the greater of $350 per day or 10% of Gross Revenue earned during the period of interim management. In addition to this fee, the franchisee is responsible for all travel-related and other expenses incurred during the interim management period. This fee is in addition to all regularly occurring fees such as the Continuing Royalty Fee and Brand Fund Contributions.

This means that if a Devon Creek franchisee is unable to manage their business, Devon Creek can step in and manage the location, but the franchisee will be responsible for covering the costs of this management. This could significantly cut into the profits of the location, especially if the location is not generating much revenue during the interim management period. It is important for prospective franchisees to understand the conditions under which this fee may be imposed and to factor this potential cost into their financial planning.