What happens if funds are insufficient to cover payments to Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
rization for ACH or other electronic funds transfer in the form we or your financial institution may require at the time of signing the Promissory Note. You agree to maintain sufficient funds in the account to cover the amounts payable to us. If funds in the account are insufficient to cover the amounts payable at the time we make our periodic electronic funds transfer, the amount of the shortfall will be deemed overdue. Additionally, if the electronic funds transfer payment request is returned due to insufficient funds, you are required to pay us a fee equal to the greater of: (a) $50 or (b) the amount the bank charges us due to the insufficient funds.
If you are in default of the Promissory Note or the Franchise Agreement, we can declare the outstanding principal balance of the Promissory Note and all unpaid accrued interest immediately due and payable. If you default, you must pay our reasonable attorney's fees and other legal costs we incur in enforcing payment and collection of the balance due.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 FDD, Benjamin Franklin Plumbing requires franchisees to authorize Automated Clearing House (ACH) or other electronic funds transfers for payments. Franchisees must maintain sufficient funds in their designated bank account to cover all amounts payable to Benjamin Franklin Plumbing.
If the funds are insufficient when Benjamin Franklin Plumbing attempts to make a periodic electronic funds transfer, the shortfall is considered overdue. In addition to the overdue amount, Benjamin Franklin Plumbing will charge a fee equal to the greater of $50 or the amount the bank charges them due to the insufficient funds. This fee is in place to cover the costs incurred by Benjamin Franklin Plumbing due to the failed payment.
Furthermore, if any payment to Benjamin Franklin Plumbing is overdue, the franchisee is required to pay interest on the overdue amount. The interest is calculated from the date the payment was due until it is paid, at a rate of 12% per annum or the maximum rate permitted by law, whichever is less. Benjamin Franklin Plumbing also has the right to charge late fees, which increase with each subsequent occurrence of a late payment or report: $100 for the second occurrence, $200 for the third, and $300 for the fourth and each subsequent occurrence. These late fees are intended to compensate Benjamin Franklin Plumbing for the administrative costs of enforcing payment obligations.