What are the requirements for a Bombs Away franchisee regarding compliance with loan terms and payments?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
dministrative charge to Bombs Away Franchising within 15 days after invoice by Bombs Away Franchising accompanied by reasonable documentation.
4.7 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee, Marketing Fund Contribution, and any other amounts owed to Bombs Away Franchising by pre-authorized bank draft or in such other manner as Bombs Away Franchising may require. Franchisee shall comply with Bombs Away Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report monthly Gross Sales to Bombs Away Franchising by the 2nd day of the following month. If Franchisee fails to report monthly Gross Sales, then Bombs Away Franchising may withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last Gross Sales reported to Bombs Away Franchising, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Bombs Away Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Bombs Away Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed by law).
- (e) Costs of Collection. Franchisee shall repay any costs incurred by Bombs Away Franchising (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (f) Application. Bombs Away Franchising may apply any payment received from Franchisee to any obligation and in any order as Bombs Away Franchising may determine, regardless of any designation by Franchisee.
(g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Bombs Away Franchising any fees or amounts described in this Agreement are not dependent on Bombs
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees must adhere to specific payment terms for fees owed to the company. Franchisees are required to pay Royalty Fees, Marketing Fund Contributions, and any other amounts through pre-authorized bank drafts or as otherwise directed by Bombs Away. Franchisees must also comply with Bombs Away's payment instructions.
Franchisees must report monthly Gross Sales by the 2nd day of the following month. Failure to do so allows Bombs Away to estimate and withdraw Royalty Fees and Marketing Fund Contributions equal to 125% of the last reported Gross Sales, with a later reconciliation to determine the actual fees. Bombs Away retains the right to remotely access the franchisee's point-of-sale system to calculate Gross Sales.
Late payments incur a $100 late fee, plus interest on the unpaid amount at a rate of 18% per year, or the highest rate allowed by law if the 18% exceeds legal limits. Returned payments due to insufficient funds are subject to a $30 fee, or the maximum fee allowed by law. The franchisee is responsible for repaying all costs Bombs Away incurs while attempting to collect overdue payments, including reasonable attorney fees. Bombs Away has the discretion to apply any payment received to any obligation in any order it determines, regardless of any designation made by the franchisee.
The franchisee's obligation to pay fees is independent of Bombs Away's performance, meaning franchisees must make all payments without any offset or deduction. This underscores the importance of franchisees maintaining diligent financial practices and ensuring timely and accurate reporting of Gross Sales to avoid penalties and maintain a positive financial standing with Bombs Away.