Can Annex Brands change the automatic bank draft payment method for the Royalty fee?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee | 5% of Gross Receipts (2) | Each Wednesday, after the close of business, for the previous week ending Saturday | We may establish other due dates. You must report Gross Receipts each Saturday after the close of business before midnight for the week ending on that Saturday. You must pay us by automatic bank draft. (3) |
Source: Item 6 — OTHER FEES (FDD pages 24–32)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, franchisees are required to pay the royalty fee through automatic bank drafts. The royalty fee is 5% of gross receipts, and it is due each Wednesday after the close of business for the previous week ending Saturday. While the FDD states that Annex Brands may establish other due dates for the royalty fee, it does not specify whether Annex Brands can change the automatic bank draft payment method.
For prospective Annex Brands franchisees, this means that the automatic bank draft is the standard payment method for royalty fees. Franchisees must ensure they have sufficient funds in their accounts to cover these payments. Additionally, Note 3 in Item 6 mentions that some banks may charge a fee for electronic transfers, which the franchisee is responsible for paying.
It is important to note that the FDD does not explicitly address whether Annex Brands can alter the payment method from automatic bank draft to another method. A prospective franchisee should seek clarification from Annex Brands on whether there are any circumstances under which the payment method could be changed, and if so, what alternative methods might be acceptable. This information is crucial for financial planning and managing the ongoing obligations of the franchise agreement.