Can Azal Coffee specify that payments be made via electronic fund transfers that they initiate?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Your payments to us for royalty, local advertising fees, marketing fund contributions, mobile application and technology fees, training, renewal and transfer fees, management fees, mystery shopper fees, relocation fees, litigation expenses, late charges and interest, amounts owed for products or services provided by us or our affiliates, amounts owed for maintenance expenses we incur under Section 8.8, amounts owed for management fees, amounts owed for liquidated damage amounts, and all other amounts you owe to us or our affiliates must be made by electronic or similar funds transfer in the appropriate amounts from your bank account to our accounts, and at the places or in the manner we may specify. You must make payments at the times specified in this Agreement or as we may otherwise specify. You agree that we may specify payment by electronic fund transfers that we initiate. You must sign and deliver to your bank and to us the documents necessary to authorize and effectuate fund transfers as specified by us. You agree not to terminate the authorization as long as this Agreement is in effect. You agree not to close your bank account without providing us prior written notice and establishing a substitute bank account for the transfers. You also agree to make all required payments to us daily or weekly or at some other interval, instead of monthly or as otherwise provided in this Agreement, if we specify. You acknowledge that we may require you to make required payments at different intervals than other Azal Coffee franchisees.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees are obligated to make payments to Azal Coffee, including royalties, advertising fees, training, and other amounts owed, via electronic funds transfer. Azal Coffee retains the right to specify that these payments be made through electronic fund transfers initiated by them.
As a prospective franchisee, this means you must authorize Azal Coffee to directly debit your bank account for all required payments. You are required to sign and deliver the necessary documents to your bank and to Azal Coffee to facilitate these transfers. Furthermore, you are prohibited from terminating this authorization while the franchise agreement is in effect and must provide prior written notice before closing the bank account used for these transfers, establishing a substitute account instead.
Azal Coffee also has the right to specify the payment intervals, potentially requiring daily or weekly payments instead of monthly, and may impose different payment schedules for different franchisees. This gives Azal Coffee significant control over the payment process and ensures timely receipt of funds. Franchisees must comply with these requirements as a condition of their franchise agreement.