What constitutes a material default by an Apricot Lane franchisee regarding payments?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
r the due date. The provisions of this paragraph shall not constitute agreement by FRANCHISOR to accept such payments or statements after same are due or a commitment by FRANCHISOR to extend credit to, or otherwise finance FRANCHISEE's operation of, the Franchised Business. Further, FRANCHISEE acknowledges that the failure to pay any amounts or submit statements of Gross Revenue when due constitute a material default for which FRANCHISOR may (but is not obligated to) terminate this Agreement, as provided in Section 19 hereof.
E. Electronic Funds Transfer
Notwithstanding Section 12.B above, during FRANCHISEE's participation in the training program designated in Section 6.A above, FRANCHISEE agrees to execute all documents necessary to pay by electronic funds transfer ("EFT") all amounts due under this Agreement (including, without limitation, the Royalty, Fund contributions). FRANCHISEE agrees to maintain sufficient funds in the appropriate accounts for such withdrawals. If FRANCHISEE has not provided a statement of Gross Revenues within the time period required by Section 12.B of this Agreement, FRANCHISEE authorizes FRANCHISOR to process an EFT and debit FRANCHISEE's designated bank account on the basis of the information we obtain pursuant to Section 13.C or the most recent statement of Gross Revenues FRANCHISEE has provided. If at any time FRANCHISOR determines that Gross Revenues have been understated or amounts due FRANCHISOR have been underpaid, FRANCHISEE authorizes FRANCHISOR to debit FRANCHISEE's designated bank account for the overdue amount, plus interest, as stated above. FRANCHISOR will credit any overpayment to your designated bank account promptly following
a determination that such a credit is due. Should FRANCHISEE's bank not honor any EFT for any reason, FRANCHISEE agrees that it shall be responsible for and shall pay to FRANCHISOR immediately on demand the payment and any service charge. FRANCHISOR nonetheless reserves the right to require FRANCHISEE to pay any Royalty fee, Fund contribution, or other amount due to FRANCHISOR by means other than EFT (e.g., by check) whenever FRANCHISOR deems appropriate, and FRANCHISEE agrees to comply with such payment instructions.
**F.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, failure to pay any amounts when due or to submit statements of Gross Revenue when due constitutes a material default. This gives Apricot Lane the option to terminate the Franchise Agreement, although they are not obligated to do so.
In addition to potentially losing the franchise, franchisees should be aware that all Royalty payments, advertising contributions, and other amounts due to Apricot Lane bear interest after the due date. The interest rate is set at eighteen percent (18%) per annum or the highest applicable legal rate, whichever is lower. Franchisees are also required to pay a late fee of Five Dollars ($5.00) per day for each day that any royalties or other amounts due under the Agreement are not paid after the due date, and for each day any required statement of Gross Revenue, financial statement, or other report is not submitted after the due date.
Apricot Lane requires franchisees to use an approved point-of-sale and inventory management system and software for recording all Gross Revenues, sales information, inventory information, vendor lists, and customer information. Apricot Lane has full access to all of the franchisee's data, systems, and related information, which allows them to monitor sales and payment information. Franchisees also agree to pay by electronic funds transfer (EFT) all amounts due under the agreement during their participation in the training program. If a franchisee has not provided a statement of Gross Revenues within the required time, Apricot Lane is authorized to process an EFT and debit the franchisee's bank account based on available information. If Apricot Lane determines that Gross Revenues have been understated or amounts due have been underpaid, they are authorized to debit the franchisee's bank account for the overdue amount, plus interest.