Under what circumstances is the Assistance Fee in the event of death or incapacity applicable for a Ledgers franchise?

According to Ledgers's 2025 Franchise Disclosure Document, an Assistance Fee in the event of death or incapacity is applicable if Ledgers must operate the franchise due to the franchisee's death or incapacity. The fee is calculated as Ledgers' reasonable expenses plus 10% of Gross Revenues for the period in which they operate or assist in the operation of the Franchised Business. This fee is due at the time the expense is incurred.

This means that if a Ledgers franchisee dies or becomes incapacitated and is unable to manage their business, Ledgers has the right to step in and operate the franchise. In doing so, Ledgers will charge the franchisee's estate or the franchisee an assistance fee to cover their expenses and compensate them for their management services. The fee includes all reasonable expenses incurred by Ledgers, plus 10% of the gross revenues generated during the period they are operating the business.

For a prospective Ledgers franchisee, this clause provides a safety net in the event of unforeseen circumstances such as death or incapacity. It ensures that the business can continue to operate, preserving its value and providing income for the franchisee's family or the franchisee themselves. However, it's important to note that the assistance fee can be significant, as it includes both expenses and a percentage of gross revenues. Franchisees should consider this potential cost when planning for their business and personal finances.

It is important for prospective franchisees to understand what constitutes "reasonable expenses" in this context. While the FDD specifies the calculation, it does not detail what specific expenses are covered. A prospective franchisee should seek clarification from Ledgers regarding the types of expenses that would be included in the Assistance Fee to fully understand the potential financial implications.