How does Amorino apply payments received from a franchisee?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
If you pay less than the amount due, your payment will be considered a partial payment on account of the amount owed.
Amorino may accept such payment as a partial payment, irrespective of any endorsement or other statement by you that the payment constitutes full payment.
Amorino's acceptance of any partial payment will not be considered a waiver of any of its right to demand or receive full payment, and you hereby waive any defense in this regard.
Amorino may apply your payments to any amount owed to Amorino by you, in its sole and reasonable discretion, regardless of any designation that accompanies the payment.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, Amorino has the discretion to apply payments from franchisees to any outstanding amounts owed. This means that if a franchisee owes Amorino money for various reasons, Amorino can allocate payments received to those specific debts as it sees fit, regardless of any instructions or designations the franchisee might provide with the payment.
This policy has significant implications for franchisees. Even if a franchisee intends a payment to cover a specific fee or invoice, Amorino is not obligated to honor that designation. Amorino can instead apply the payment to older debts, outstanding balances, or any other amounts the franchisee owes. This could lead to potential issues if the franchisee believes they are current on certain obligations but Amorino has applied their payments elsewhere.
Furthermore, Amorino's acceptance of a partial payment does not constitute a waiver of their right to demand or receive full payment of all outstanding amounts. The franchisee also waives any defense in this regard. This means that even if Amorino accepts a payment that is less than the full amount owed, they still retain the right to pursue the franchisee for the remaining balance. Franchisees should maintain careful records of all payments and outstanding balances to avoid potential disputes with Amorino over payment allocations.
This type of payment application policy is not uncommon in franchising, as it protects the franchisor's financial interests. However, franchisees need to be aware of this policy and its potential consequences to ensure they manage their payments and accounts effectively. It is advisable for prospective franchisees to discuss this policy with existing franchisees and seek clarification from Amorino regarding any specific concerns or scenarios.