Does the Bevaris Alliance agreement allow for any deductions or withholdings from payments?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 25.1 No set-off. All amounts due under this agreement shall be paid in full without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax as required by law).
- 25.2 Interest. If any party fails to make any payment due to the other under this agreement by the due date for payment, then, without limiting the other party's remedies under clause 20 and clause 21, the defaulting party shall pay interest on the overdue amount at the rate of 10% per annum or the maximum percentage of interest allowed by law, whichever is greater. Such interest shall accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The defaulting party shall pay the interest together with the overdue amount. In relation to payments disputed in good faith, interest under this clause is payable only after the dispute is resolved, on sums found or agreed to be due, from the due date until payment.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, all amounts due under the franchise agreement must be paid in full without any set-off, counterclaim, deduction, or withholding. The only exception to this rule is for any deduction or withholding of tax as required by law. This means that franchisees are obligated to remit the full amount of royalties, fees, and other payments as outlined in the agreement, unless legally mandated tax withholdings apply.
If a franchisee fails to make payments by the due date, Bevaris Alliance can charge interest on the overdue amount. The interest rate will be 10% per annum or the maximum percentage of interest allowed by law, whichever is greater. This interest accrues daily from the due date until the payment is made. However, if a payment is disputed in good faith, interest is only payable after the dispute is resolved, on the sums found to be due, from the original due date until payment.
This clause protects Bevaris Alliance from franchisees attempting to reduce or delay payments for reasons not explicitly permitted by law. It ensures a steady revenue stream for the franchisor and provides a mechanism for addressing late payments. Prospective franchisees should be aware of this requirement and ensure they have sufficient financial resources to meet their obligations under the franchise agreement.