What is the cure period for a Fly To Fit franchisee's failure to make payments?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Subject to 10-Day Cure Period.
Fly To Fit Franchise may terminate this Agreement if Franchisee does not make any payment to Fly To Fit Franchise when due, or if Franchisee does not have sufficient funds in its account when Fly To Fit Franchise attempts an electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Fly To Fit Franchise gives notice to Franchisee of such breach.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to the 2024 Fly To Fit Franchise Disclosure Document, if a franchisee fails to make any payment when due or lacks sufficient funds for an electronic withdrawal, they have a 10-day cure period to resolve the non-payment after receiving notice from Fly To Fit. If the franchisee does not cure the non-payment within this timeframe, Fly To Fit has the right to terminate the franchise agreement.
Fly To Fit requires royalty fees, marketing fund contributions, and any other amounts owed to be paid via pre-authorized bank draft or another method they specify. Franchisees must report their monthly gross sales by Tuesday of the following month. If a franchisee fails to report monthly gross sales, Fly To Fit can withdraw estimated royalty fees and marketing fund contributions equal to 125% of the last reported gross sales, with a true-up of the actual fees occurring after the franchisee reports gross sales. Fly To Fit also retains the right to remotely access the franchisee's point-of-sale system to calculate gross sales.
In the event of late payments, Fly To Fit assesses a $100 late fee, along with interest on the unpaid amount at a rate of 18% per year, or the highest rate allowed by law if 18% exceeds legal limits. Additionally, a $30 fee may be charged for any payment returned due to insufficient funds, again subject to legal limits. The franchisee is responsible for covering all costs Fly To Fit incurs while attempting to collect overdue payments, including reasonable attorney fees.
Fly To Fit has the discretion to apply any payment received from the franchisee to any outstanding obligation in any order they choose, irrespective of any designation made by the franchisee. The franchisee's payment obligations are independent of Fly To Fit's performance and must be made without any offset or deduction. This means a franchisee cannot withhold payments due to any dispute or perceived failure of Fly To Fit to fulfill its obligations.