What is the purpose of the Authorization Agreement for Preauthorized Payment Service for Beauty Bungalows?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
APPENDIX B TO FRANCHISE AGREEMENT
AUTHORIZATION AGREEMENT FOR PREAUTHORIZED PAYMENT SERVICE
I (or We if there are joint owners of the account referenced later in this agreement) authorize and request Beauty Bungalows Franchising, LLC (the "Company") to obtain payment for all royalty amounts I (we) owe to the Company pursuant to the Franchise Agreement between the Company and me (us), as these amounts become due by initiating a payment entry to my (our) account. The account number, name of financial institution, payment amount, and date on or immediately after which payment should be deducted from the account are identified below. In addition, I (we) authorize and request the financial institution, now referred to as the Bank, to accept the payment entries presented to the Bank and to deduct them from my (our) account without responsibility for the correctness of these payments.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the Authorization Agreement for Preauthorized Payment Service, outlined in Appendix B of the Franchise Agreement, serves to authorize Beauty Bungalows Franchising, LLC to collect royalty payments owed by the franchisee.
Specifically, by signing this agreement, the franchisee grants Beauty Bungalows permission to automatically deduct royalty amounts from their designated bank account as they become due, according to the terms of the Franchise Agreement. The agreement requires the franchisee to provide their account number, the name of their financial institution, the payment amount, and the date on or immediately after which the payment should be deducted.
Furthermore, the franchisee authorizes their bank to accept these payment entries and deduct the specified amounts from their account without liability for verifying the correctness of the payments. This arrangement streamlines the royalty payment process, ensuring timely and consistent payments to Beauty Bungalows while reducing the administrative burden on both the franchisee and the franchisor.