When signing the Benjamin Franklin Plumbing Franchise Agreement, what account designation is required?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
e to waive demand for payment, presentment for payment, protest, notice of nonpayment or dishonor, and any and all other notices and demands whatsoever.
Under the Franchise Agreement, you must make all payments to us by the payment method(s) we designate from time to time, and this requirement applies to the Promissory Note. We currently require payment by Automated Clearing House (ACH) or electronic funds transfer and you are required to designate an account at a commercial bank of your choice at the time of signing your Franchise Agreement from which we are able to make withdrawals. You agree to complete and submit to us an authorization 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 i
Source: Item 10 — FINANCING (FDD pages 45–46)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, when signing the Franchise Agreement, franchisees are required to designate an account at a commercial bank. This account will be used for Automated Clearing House (ACH) or electronic funds transfer payments to Benjamin Franklin Plumbing. Franchisees must authorize Benjamin Franklin Plumbing to make withdrawals from this account.
This requirement ensures that Benjamin Franklin Plumbing can reliably collect payments from franchisees. Franchisees must maintain sufficient funds in the designated account to cover all payments due. If the account lacks sufficient funds, the shortfall is considered overdue, and Benjamin Franklin Plumbing may charge a fee. This fee is the greater of $50 or the amount the bank charges Benjamin Franklin Plumbing due to the insufficient funds.
This type of payment arrangement is common in franchising, as it provides a streamlined and automated way for franchisors to receive payments. Franchisees should ensure they understand the terms of the ACH authorization and maintain adequate funds in the designated account to avoid penalties and potential default on their Franchise Agreement.