What is the amount of the Insufficient Funds fee for an All States M.E.D. franchise?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee1 | 8% of Gross Revenues | Due monthly by the 10th of the month for the previous month | "Gross Revenue" means all of your revenue from operating the franchise, but excluding taxes collected from customers and paid to taxing authority, and reduced by the amount of any documented refunds, credits, allowances, and chargebacks the Business in good faith gives to customers. FA 3.2. |
| Local Advertising | The greater of 2% of Gross Revenues or $1,000 per month | Monthly | You are required to spend these sums on local advertising and promotions pursuant to our guidelines. FA 11.2. |
| Grand Opening Advertising | $3,000 - $10,000 | Around the time of opening | You agree to pay these sums to promote the opening of your business pursuant to our guidelines. FA 11.2. |
| Interest | Lesser of 1.5% per month or the highest commercial contract interest rate allowed by law | 15 days after billing | Due on all overdue amounts. FA 3.5. |
| National Franchise Convention Fee | $500 | As Incurred | We reserve the right to charge this fee if we offer an Annual Franchise Convention. FA 3.6. |
| Maintenance and Refurbishing of Business | You must reimburse our expenses | As incurred | If, after we notify you, you do not undertake efforts to correct deficiencies in outlet appearance, then we can undertake the repairs and you must reimburse us. FA 3.7. |
| Insufficient Funds | $75 | As incurred | Due if you have insufficient funds in your EDTA to cover a payment, or if you pay by check, a check is returned for insufficient funds. FA 3.8. |
| Relocation Assistance | Our actual cost | At time of assistance | If you need our assistance to relocate. FA 3.9. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, an insufficient funds fee of $75 is charged if a franchisee has insufficient funds in their EDTA (Electronic Draft Transfer Agreement) to cover a payment, or if a check is returned due to insufficient funds. This fee is incurred as needed.
For a prospective All States M.E.D. franchisee, this means that maintaining sufficient funds in the designated account for payments is crucial to avoid this additional expense. Franchisees should ensure they have enough funds to cover royalty fees and other payments to All States M.E.D. to avoid incurring this fee.
While a $75 fee may seem minor, these types of fees can add up, especially if a franchisee frequently encounters cash flow issues. It is a standard practice for franchisors to charge such fees to cover the administrative costs associated with handling failed payments. Franchisees should consider this when managing their finances and ensure they have a buffer to avoid these charges.