Does Beard Papas require franchisees to sign an ACH Authorization Form?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be required to sign an ACH Authorization Form (Franchise Agreement, Exhibit 7) permitting us to electronically debit your designated bank account for payment of all fees payable to us and/or our affiliates. You must deposit the Gross Sales of your Shop into the designated bank accounts that are subject to our ACH authorization. You must install and use, at your expense, the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit and/or electronic funds transfer systems that we designate and require in the operation of your Shop. You must pay all service charges and fees charged to you by your bank so that we may electronically debit your bank account.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, franchisees are required to sign an ACH Authorization Form. This form, referenced as Exhibit 7 in the Franchise Agreement, allows Beard Papas to electronically debit the franchisee's designated bank account for all fees payable to them or their affiliates. This requirement ensures that Beard Papas can automatically collect payments such as royalty fees, brand development fund fees, and technology fees.
In practice, this means a prospective Beard Papas franchisee must agree to have funds automatically withdrawn from their business bank account to cover ongoing fees. The FDD specifies that franchisees must deposit the Gross Sales of their shop into bank accounts subject to ACH authorization. Furthermore, franchisees are responsible for installing and using pre-authorized payment systems designated by Beard Papas, including point of sale, credit card processing, and electronic funds transfer systems.
This requirement also extends to covering any service charges or fees imposed by the franchisee's bank for these electronic debits. The royalty fee is 5% of Gross Sales, the Brand Development Fund is up to 2% of Gross Sales, and the Technology fee can be up to $500 per month. These fees, along with others, will be automatically debited from the franchisee's account.
Therefore, a Beard Papas franchisee needs to ensure they maintain sufficient funds in their designated bank account to cover these recurring fees and any associated bank charges. Failure to do so could result in penalties, such as the NSF Check Fee or Failed Electronic Fund Transfer fee, which is 5% of the amount or $50, whichever is greater, or the maximum fee allowed by law.