If Baya Bar over-debits royalty fees, how will the excess be handled?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
You must report your Gross Sales to us by Tuesday each week for the previous week ending Sunday. The royalty fee and marketing fund fees will be withdrawn from your designated bank account by electronic funds transfer ("EFT") weekly on Tuesday based on the Shop's Gross Sales for the preceding week ending Sunday. If you do not report the Shop's Gross Sales, we may debit your account for 120% of the last royalty fee and marketing fund fees that we debited. If the fees we debit are less than the fees you actually owe us, once we have been able to determine the true and correct Gross Sales, we will debit your account for the balance on a day we specify. If the fees we debit are greater than the fees you actually owe us, we will credit the excess against the amount we otherwise would debit from your account during the following week.
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if the royalty and marketing fund fees that Baya Bar debits from a franchisee's account are greater than the amount actually owed, Baya Bar will credit the excess amount against the amount they would otherwise debit from the franchisee's account during the following week.
This means that if a Baya Bar franchisee is overcharged, they will not receive a direct refund. Instead, the overcharge will be applied as a credit to reduce the amount of the next weekly debit. This is a fairly standard practice in franchising, as it simplifies the accounting process for both the franchisor and the franchisee.
It is important for a prospective Baya Bar franchisee to carefully review their weekly sales reports and bank statements to ensure that the royalty and marketing fund fees being debited are accurate. If a franchisee notices a discrepancy, they should immediately contact Baya Bar to resolve the issue and ensure that the appropriate credit is applied to their account the following week.