Does the 1 800 Packouts franchise agreement specify any penalties for underpayment of the NROP fee?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalty Fees and the Marketing Fee will be due and payable by Electronic Funds Transfer ("EFT"), or such other method as we may prescribe, upon the earlier occurring of i) when payment is received from the client or ii) 180 days following the initial service date with the client. You must notify us within no more than three (3) days of any payment being received by uploading a copy of the check into the tracking system. In the event that it is discovered you have not properly notified us of payments, we shall have the right to charge any interest or penalties proscribed by this agreement. We may require that you authorize us to initiate debit or credit entries and/or credit collection entries to your bank and that you make funds available for withdrawal by EFT no later than the due date for payment. We reserve the right to collect these fees on a weekly basis if you are delinquent in any Royalty Fees or Marketing Fee payments three times in any 12-month period.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, the franchise agreement does not explicitly detail specific penalties for underpayment of the National/Regional Opportunity Protection (NROP) fee. However, it does state that if a franchisee fails to properly notify 1 800 Packouts of payments received, the company reserves the right to charge any interest or penalties prescribed by the agreement.
Furthermore, 1 800 Packouts retains the right to collect Royalty Fees and Marketing Fees on a weekly basis if a franchisee is delinquent in any Royalty Fees or Marketing Fee payments three times within a 12-month period. While this clause refers specifically to Royalty Fees and Marketing Fees, it indicates a broader pattern of the franchisor's approach to handling late or deficient payments.
Prospective franchisees should carefully review the entire Item 23 within the FDD, along with the franchise agreement, to fully understand all potential penalties and interest charges applicable to various fees, including the NROP fee. It would be prudent to seek clarification from 1 800 Packouts regarding the specific penalties for NROP fee underpayment to avoid potential financial repercussions.