Does the non-compliance fee limit Fly To Fit's other rights and remedies?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
g program after opening, Fly To Fit Franchise may charge its then-current training fee. As of the date of this Agreement, the training fee is $350 per day.
- 4.5 Non-Compliance Fee. Fly To Fit Franchise may charge Franchisee $500 for any instance of non-compliance with the System Standards or this Agreement (other than Franchisee's nonpayment of a fee owed to Fly To Fit Franchise) which Franchisee fails to cure after 30 days' notice. Thereafter, Fly To Fit Franchise may charge Franchisee $250 per week until Franchisee ceases such non-compliance. This fee is a reasonable estimate of Fly To Fit Franchise's internal cost of personnel time attributable to addressing the non-compliance, and it is not a penalty or estimate of all damages arising from Franchisee's br
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the non-compliance fee does not limit Fly To Fit's other rights and remedies. Fly To Fit may charge a franchisee $500 for any instance of non-compliance with the System Standards or the Franchise Agreement (other than nonpayment of a fee owed to Fly To Fit) if the franchisee fails to correct the issue after 30 days' notice. Following this initial fee, Fly To Fit may then charge the franchisee $250 per week until the non-compliance is resolved.
The FDD states that this fee is considered a reasonable estimate of Fly To Fit's internal costs related to addressing the non-compliance and is not a penalty or an estimate of all potential damages from the franchisee's breach. This means Fly To Fit is attempting to recoup its administrative costs, not quantify all potential losses.
Importantly, the non-compliance fee is explicitly stated to be in addition to all of Fly To Fit's other rights and remedies, including default and termination rights as outlined in Section 14.2 of the Franchise Agreement. This clarifies that Fly To Fit retains the ability to pursue other legal or contractual remedies, such as terminating the agreement for repeated or severe breaches, even while charging the non-compliance fee. This is a common practice in franchising, allowing franchisors to address minor infractions without necessarily escalating to termination while still maintaining their broader rights.