When is the Ella Cafe Default Fee due?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnity | Our costs and losses from any legal action related to the operation of your franchise | On demand | You must indemnify and defend (with counsel reasonably acceptable to us) us and our affiliates against all losses in any action by or against us related to, or alleged to arise out of, the operation of your franchise (unless caused by our misconduct or negligence). |
| Prevailing Party's Legal Costs | Our attorney fees, court costs, and other expenses of a legal proceeding, if we are the prevailing party | On demand | In any legal proceeding (including arbitration), the losing party must pay the prevailing party's attorney fees, court costs and other expenses. |
| Default Fee. | $0 - $1,500 per event of default plus cost of reinspection and enforcement (if applicable) | Within 3 days of Demand | If you are in default under this Agreement, at our discretion, and without waiver of any of our rights under this Agreement, we may impose a fee in an amount up to $1,500 per event of default, plus the cost of re inspections and the cost of enforcing compliance. You must pay the Default Fee within 3 days of our demand. |
| Interim Period | 150% of the current Royalty Fees due | On Demand | Payable if you continue to operate your business after expiration or termination of the franchise agreement without renewal and the r |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the Default Fee is due within 3 days of demand. This fee, ranging from $0 to $1,500 per event of default, plus the cost of reinspection and enforcement if applicable, may be imposed by Ella Cafe if a franchisee is in default under the Franchise Agreement.
This means that if an Ella Cafe franchisee violates the terms of their agreement, Ella Cafe has the right to charge this fee. The amount can vary depending on the specific default and any associated costs for reinspection or enforcement. The franchisee is then obligated to pay this fee promptly, specifically within three days of receiving a demand for payment from Ella Cafe.
It is important for prospective Ella Cafe franchisees to understand what constitutes a default under the Franchise Agreement to avoid incurring this fee. Franchisees should also be prepared to pay this fee quickly if they do find themselves in default, as the short payment window could lead to further penalties or legal action if not met.