Under the Bevaris Alliance agreement, are payments required to be made in full without any set-off?
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 payments 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 any deduction or withholding of tax as required by law. This means a franchisee cannot deduct any amount they believe they are owed from their payments to Bevaris Alliance, unless it is a legally mandated tax withholding.
This requirement is fairly standard in franchising, as it ensures a consistent revenue stream for the franchisor. It is important for prospective Bevaris Alliance franchisees to understand that they must resolve any disputes or claims separately from their payment obligations. Failure to pay the full amount due could result in penalties, such as interest charges.
Specifically, if a franchisee fails to make a payment by the due date, Bevaris Alliance can charge interest on the overdue amount. The interest rate is 10% per annum or the maximum percentage 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.