What does Appendix F, 'Electronic Fund Transfer Authorization,' authorize Azal Coffee to do?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
APPENDIX F - ELECTRONIC FUND TRANSFER AUTHORIZATION
AUTHORIZATION TO HONOR CHARGES DRAWN BY AND PAYABLE TO DURAR INVESTMENT, LLC ("FRANCHISOR")
The depositor identified below ("Depositor") authorizes Durar Investment, LLC and its designees and affiliates ("Franchisor") to initiate credit and debit entries electronically (referred to as an ACH or EFT transaction) or otherwise to Depositor's checking or savings account indicated below (the "Account") for charges associated with the Franchise Business including but not limited to Royalty fees, Marketing Fund contributions, late fees or interest, liquidated damages, fines, penalties, or any other fees that may become due to Franchisor. Depositor further authorizes the depository or bank designated below (the Depository") to credit and/or debit the same to the Account.
Debts to the Depositor's Account that are not honored by the Depositor's bank will incur a returned item charge upon each occurrence in accordance with the fee schedule determined by Franchisor. For any return item, Franchisor may re-initiate the ACH transaction or require the Depositor to replace the returned item with a Cashier's check in the amount of the returned item plus any returned item fees due.
This authority is to remain in full force and effect until Depository has received joint written notification from Franchisor and Depositor of the Depositor's termination of the authority in time and in a manner as to afford Depository a reasonable opportunity to act on it.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Appendix F, titled 'Electronic Fund Transfer Authorization,' grants Durar Investment, LLC (the franchisor) the authority to initiate electronic credit and debit entries, also known as ACH or EFT transactions, from the franchisee's designated checking or savings account. This authorization covers charges associated with the Azal Coffee franchise business. These charges include, but are not limited to, royalty fees, marketing fund contributions, late fees or interest, liquidated damages, fines, penalties, and any other fees that may become due to Azal Coffee.
This agreement also authorizes the franchisee's bank to credit and/or debit the account for these amounts. If any debit is not honored by the franchisee's bank, a returned item charge will be incurred for each occurrence, according to Azal Coffee's fee schedule. In the event of a return, Azal Coffee may either re-initiate the ACH transaction or require the franchisee to replace the returned item with a cashier's check, covering the amount of the returned item plus any associated fees.
The authorization remains in effect until the franchisee's bank receives joint written notification from both Azal Coffee and the franchisee, indicating the franchisee's termination of the authorization. This notification must be provided in a timely manner to allow the bank a reasonable opportunity to act on it. This means a franchisee cannot unilaterally terminate the electronic fund transfer authorization; it requires the franchisor's consent. This ensures that Azal Coffee has a secure and reliable method for collecting ongoing fees and other payments from its franchisees.