What is the weekly non-compliance fee that Ella Cafe may charge after the initial 30-day notice period?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Non-Compliance Fee.** Franchisor may charge Franchisee $500 for any instance of noncompliance with the System Standards or this Agreement (other than Franchisee's non-payment of a fee owed to Franchisor) which Franchisee fails to cure after 30 days' notice. Thereafter, Franchisor may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Franchisor' internal cost of personnel time attributable to
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a franchisee fails to comply with the franchise agreement, Ella Cafe may charge a non-compliance fee. After an initial 30-day notice period to cure the non-compliance, Ella Cafe can charge the franchisee $250 per week until the non-compliance ceases.
This fee is designed to cover Ella Cafe's internal costs related to addressing the non-compliance, specifically the personnel time spent on the issue. The FDD states that this fee is considered a reasonable estimate of these costs and is not a penalty, nor does it represent the full extent of damages Ella Cafe could claim due to the breach.
It's important to note that this non-compliance fee is in addition to any other rights and remedies that Ella Cafe has, including the ability to declare a default and terminate the franchise agreement under Section 14.2 of the agreement. This means that in addition to paying the weekly fee, a franchisee could also face further consequences for failing to correct the non-compliance.