Does Black Bear Diner have the right to copy my franchise's bank statements?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor requires all Royalty Fee payments, Marketing Fund Contributions, product purchases and other amounts due to Franchisor to be paid through an Electronic Depository Transfer Account. Franchisee agrees to establish an account providing for electronic funds transfer, and Franchisor shall have access to such account for the purpose of receiving amounts due to Franchisor from Franchisee. Franchisee agrees to execute any documents as Franchisor's or Franchisee's bank requires in order to implement the Electronic Deposit Transfer Account. Franchisee agrees not to close the Electronic Deposit Transfer Account without Franchisor's approval. A copy of Franchisor's current form of authorization known as the "Authorization Agreement For Automatic Debit" is included as Exhibit E.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, Black Bear Diner requires all Royalty Fee payments, Marketing Fund Contributions, product purchases, and other amounts due to be paid through an Electronic Depository Transfer Account. As a franchisee, you must establish an account that allows for electronic funds transfer, and Black Bear Diner will have access to this account to receive payments. You must also sign any documents required by the banks to implement the Electronic Deposit Transfer Account and cannot close this account without Black Bear Diner's approval. A copy of Black Bear Diner's current form of authorization known as the "Authorization Agreement For Automatic Debit" is included as an exhibit.
This means that Black Bear Diner does not directly copy your bank statements. Instead, they require you to set up an electronic transfer account that they can access for the specific purpose of receiving payments owed to them. This is a common practice in franchising to ensure timely and accurate payment of fees and purchases.
As a prospective franchisee, it is important to carefully review Exhibit E, the "Authorization Agreement For Automatic Debit," to fully understand the scope of Black Bear Diner's access to your account and your obligations regarding electronic fund transfers. You should also clarify with Black Bear Diner what specific information they can access and how they will use it to ensure your comfort level with the arrangement.