What constitutes a non-compliance fee for a My Salon Suite franchisee?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is in default of any provision of this Franchise Agreement and Franchisee fails to timely cure the default following Franchisor's notice to Franchisee, Franchisor may, at its option, elect to charge a non-compliance fee of two and one half percent (2.5%) of Franchisee's Gross Revenues, two percent (2%) of which payable to Franchisor in the same manner as the Royalty Fee and one half percent (0.5%) payable to the Brand Building Fund in the same manner as the Fund Contribution, until Franchisee cures the default.
The noncompliance fee shall be in addition to any other applicable fees or penalties set forth in this Franchise Agreement.
Franchisor will provide written notice to Franchisee before charging the non-compliance fee.
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
According to the 2025 My Salon Suite Franchise Disclosure Document, a non-compliance fee may be charged if a franchisee defaults on any provision of the Franchise Agreement and fails to correct the default after receiving notice from My Salon Suite. In such cases, My Salon Suite has the option to charge a non-compliance fee.
The non-compliance fee is calculated as 2.5% of the franchisee's Gross Revenues. Of this, 2% is payable to My Salon Suite in the same manner as the Royalty Fee, and 0.5% is payable to the Brand Building Fund, mirroring the Fund Contribution process. This fee remains in effect until the franchisee rectifies the default.
The FDD specifies that the non-compliance fee is in addition to any other applicable fees or penalties outlined in the Franchise Agreement. My Salon Suite will provide written notice to the franchisee before imposing the non-compliance fee. This fee serves as a financial disincentive for franchisees to remain in default and incentivizes them to promptly address any breaches of the agreement.