When must a Bang Cookies franchisee execute the ACH Authorization Form?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Payment Authorization: Upon the request of Franchisor and in no event not later than 30 days prior to the earlier of the Actual Business Commencement Date or the Scheduled Business Commencement Date, Franchisee shall execute Franchisor's designated ACH Authorization Form and such other authorization agreements, in the form proscribed by Franchisor and permitting Franchisor's direct withdrawal and/or electronic transfer of sums from Franchisee's designated business bank account, for the on-going payment of Royalty Fees, and other fees and sums due from Franchisee under this Agreement. As of the Effective Date, Franchisor's current ACH Authorization that must be executed and complied with by Franchisee is attached to this Agreement as Exhibit 7. Franchisor may require Franchisee to pay the Royalty Fees and other amounts due under this Agreement by means other than ACH and/or automatic debit whenever Franchisor deems appropriate, and Franchisee agrees to comply with Franchisor's payment instructions.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, a franchisee must execute the ACH Authorization Form upon the franchisor's request, but no later than 30 days prior to the earlier of the Actual Business Commencement Date or the Scheduled Business Commencement Date. This form allows Bang Cookies to directly withdraw or electronically transfer funds from the franchisee's designated business bank account for ongoing payments such as Royalty Fees and other fees due under the Franchise Agreement. Exhibit 7 of the Franchise Agreement contains the current ACH Authorization form that the franchisee must execute and comply with.
This requirement ensures that Bang Cookies can efficiently collect Royalty Fees and other payments from franchisees. The "Actual Business Commencement Date" refers to the date the franchisee's Bang Cookies shop actually opens for business, while the "Scheduled Business Commencement Date" is the date the shop is expected to open. The franchisee must complete the ACH form 30 days before whichever of these dates comes first.
Bang Cookies retains the right to require franchisees to pay Royalty Fees and other amounts through methods other than ACH or automatic debit if deemed appropriate. Franchisees must comply with Bang Cookies's payment instructions, giving the franchisor flexibility in managing payment processes. This clause protects Bang Cookies by ensuring timely payments and providing alternative payment options if necessary.