When is the payment due to Endless Summer Sweets for curing non-compliance on behalf of the franchisee?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Our out-of-pocket | When billed | We may cure your non-compliance on | |
| costs and internal | your behalf (for example, if you do not | ||
| cost allocation, plus | have required insurance, we may purchase | ||
| 10% | insurance for you), and you will owe our | ||
| costs plus a 10% administrative fee. |
Source: Item 7 — Estimated Initial Investment (FDD pages 10–14)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, if Endless Summer Sweets cures a franchisee's non-compliance, payment is due to Endless Summer Sweets when billed. This would cover out-of-pocket costs and internal cost allocation, plus 10%.
For example, if a franchisee does not have the required insurance, Endless Summer Sweets may purchase it on their behalf. The franchisee will then owe Endless Summer Sweets the costs of the insurance plus a 10% administrative fee. This is a fairly standard practice in franchising, allowing the franchisor to ensure brand standards and legal compliance are maintained even if a franchisee falls short.
It is important for a prospective Endless Summer Sweets franchisee to understand that while this clause can be helpful in preventing a serious breach of the franchise agreement, it also means they are responsible for reimbursing Endless Summer Sweets for any costs incurred, plus the additional administrative fee. Franchisees should maintain all required insurance and other compliance measures to avoid these charges.