What are the two specific actions that a Bhc franchisee must take to comply with the electronic funds transfer requirement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor requires payment of the Royalty and Marketing and Promotion Fees by electronic funds transfer ("EFT"), through the Automated Clearing House ("ACH") electronic network for financial transactions (or such other automatic payment mechanism Franchisor may designate) directly from Franchisee's account into Franchisor's operating account. Franchisee must (i) execute and deliver to Franchisor's bank required pre-authorized check forms and other instruments or drafts to enable Franchisor to draw directly from Franchisee's bank account all fees payable under the terms of this Agreement and (ii) open and maintain a single bank account for such payments (with overdraft protection from Franchisee's operating account) always keeping the minimum balance in such account as Franchisor may reasonably designate. Franchisee must not alter or close this account except upon Franchisor's prior written approval. Any failure by Franchisee to implement such EFT system in strict accordance with Franchisor's instructions will constitute a material breach of this Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees are required to make Royalty and Marketing and Promotion Fee payments via electronic funds transfer (EFT). To comply with this requirement, a Bhc franchisee must take two specific actions.
First, the franchisee must execute and deliver to Bhc's bank the required pre-authorized check forms and other instruments or drafts. This enables Bhc to directly withdraw all payable fees from the franchisee's bank account under the terms of the Franchise Agreement.
Second, the franchisee must open and maintain a single bank account specifically for these payments. This account should have overdraft protection from the franchisee's operating account, and the franchisee must maintain the minimum balance that Bhc reasonably designates. The franchisee cannot alter or close this account without prior written approval from Bhc. Failure to strictly adhere to these EFT system instructions constitutes a material breach of the Franchise Agreement.