Under what circumstances does Ella Cafe charge a $500 Non-Compliance fee?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Software | Currently, $100 - | Monthly | |
| Subscription | $200 per month | ||
| Non-Compliance | $500 | On demand | |
| Fee | |||
| Customer Rewards, and Gift Cards | Currently not implemented by us but may be implemented in future | As invoiced | Fees for access management of customer rewards, and/or gift card system and redemption. |
| Reimbursement | Amount that we spend on your behalf, plus 10% | ||
| Late Fee | $100 plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law) | On demand | We may charge a late fee if you fail to make a required payment when due. |
| Insufficient Funds Fee | $30 (or, if such amount exceeds the maximum allowed by law, then the maximum allowed by law) | On demand | We may charge an insufficient funds fee if a payment made by you is returned because of insufficient funds in your account. |
| Costs Of Collection | Our actual costs Our actual costs | As incurred | |
| Special Support Fee | Our then-current fee, plus our expenses. Currently, $600 per day. | On demand |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a Non-Compliance Fee of $500 is charged on demand. However, the FDD does not specify the exact circumstances that would trigger this fee.
While the FDD lists a $500 Non-Compliance Fee, it lacks specific details on what actions or omissions constitute "non-compliance." Other fees listed in Item 6 provide more context. For example, Ella Cafe may charge a Records Audit fee if a franchisee fails to submit required reports or under-reports gross sales by more than 3% for any 4-week period. A Special Inspection Fee may be charged due to a governmental report, customer complaint, or non-compliance with system specifications. A Default Fee ranging from $0 to $1,500 may be imposed for events of default under the franchise agreement.
To fully understand the potential triggers for the $500 Non-Compliance Fee, prospective Ella Cafe franchisees should seek clarification from the franchisor. Specifically, they should ask for a comprehensive list of actions or omissions that would be considered "non-compliance" and result in the fee. Understanding these specifics is crucial for budgeting and ensuring adherence to Ella Cafe's standards and requirements.