What is the All States M.E.D. franchisee's obligation regarding deposits to the EDTA account?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor shall require all Royalty Fees, amounts due for purchases by Franchisee from Franchisor and other amounts due to Franchisor to be paid through an Electronic Depository Transfer Account ("EDTA"). At Franchisor's request, Franchisee shall open and maintain an EDTA, and shall provide Franchisor with continuous access to such account for the purpose of receiving any payments due to Franchisor. Franchisee shall make deposits to the account sufficient to cover amounts owed to Franchisor prior to the date such amounts are due. Franchisee shall execute any documents Franchisor's or Franchisee's bank requires to establish and implement the EDTA. Once established, Franchisee shall not close the EDTA without Franchisor's written consent.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the franchisee is obligated to use an Electronic Depository Transfer Account (EDTA) for payments to the franchisor. All States M.E.D. requires that all Royalty Fees, amounts due for purchases by the franchisee from All States M.E.D., and any other amounts owed to All States M.E.D. be paid through this EDTA.
The franchisee is required to open and maintain an EDTA at a national banking institution approved by All States M.E.D. Furthermore, the franchisee must provide All States M.E.D. with continuous access to this account, allowing them to electronically withdraw funds owed to them. The franchisee is responsible for depositing sufficient funds into the EDTA to cover these amounts before they are due.
The franchisee must also execute any documents required by either All States M.E.D.'s bank or the franchisee's bank to establish and implement the EDTA. Once the EDTA is set up, the franchisee cannot close the account without obtaining written consent from All States M.E.D.