Can Baya Bar require franchisees to authorize automatic payments for fees?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
AUTHORIZATION AGREEMENT AUTOMATIC DEPOSITS (ACH WITHDRAWALS)
Franchisor Name: Baya Bar Franchise Systems, LLC
I (We) hereby authorize Baya Bar Franchise Systems, LLC, hereinafter called Franchisor, to initiate debit entries to my (our) Checking Account/Savings Account (Select One) indicated below at the depository financial institution named below, and to debit the same to such account. I (We) acknowledge that the origination of ACH transactions to my (our) account must comply with the provisions of U.S. Law, and that I will be responsible for any banking fees that my institution charges.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees are required to authorize automatic deposits for payments to Baya Bar Franchise Systems, LLC. The document includes an "Authorization Agreement Automatic Deposits (ACH Withdrawals)" form, which the franchisee must complete to allow Baya Bar to debit their checking or savings account for fees. The franchisee is responsible for any banking fees their institution charges related to these ACH transactions.
This agreement allows Baya Bar to directly withdraw funds from the franchisee's account, ensuring timely payment of fees. This is a common practice in franchising as it provides the franchisor with a reliable method of collecting royalties and other payments. The franchisee acknowledges that the ACH transactions must comply with U.S. Law.
By signing the authorization agreement, the franchisee gives Baya Bar the ability to initiate debit entries for fee payments. The franchisee should carefully review the terms of the agreement and understand their rights and responsibilities regarding these automatic withdrawals. It is important for the franchisee to maintain sufficient funds in the designated account to cover the payments and to monitor the account for any unauthorized transactions.