What is an 'Electronic Depository Transfer Account' and what is its purpose for a Boulder Designs franchisee?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Electronic Depository Transfer Account" means an account established at a national banking institution approved by Franchisor and providing Franchisor with access to electronically withdraw any funds due Franchisor;
Within 15 days after successfully completing training, but no later than 30 days prior to opening the Franchised Business, Franchisee shall open and maintain an Electronic Depository Transfer Account ("ACH") and shall provide Franchisor with continuous access to such account for the purpose of receiving any payments due to Franchisor, by signing and returning an ACH Withdrawal Form in the form prescribed by Franchisor. Franchisee will give its financial institution instructions, in a form Franchisor provides or approves, and will obtain the financial institutions agreement to follow these instructions. Franchisee will provide Franchisor with copies of these instructions and agreements. The financial institution's agreement may not be withdrawn or modified without Franchisor's written approval, which approval is within Franchisor's sole discretion. Franchisee will also sign all other forms for fund transfers as Franchisor or the financial institution may request.
Franchisor may require Franchisee's financial institution to send a monthly statement of all activity in the designated account to Franchisor at the same time it sends statements to the Franchisee.
Franchisee shall make timely deposits to the account sufficient to cover amounts owed to Franchisor prior to the date such amounts are due. Franchisee shall execute any documents Franchisor's or Franchisee's bank requires to establish and implement the Electronic Depository Transfer Account. Once established, Franchisee shall not close the Electronic Depository Transfer Account without Franchisor's written consent and the establishment of a replacement Electronic Depository Transfer Account.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, an Electronic Depository Transfer Account is defined as an account established at a national banking institution approved by Boulder Designs Franchising, LLC. This account provides Boulder Designs with the ability to electronically withdraw funds owed to them.
Within 15 days of completing training, but no later than 30 days before opening their Boulder Designs business, franchisees must open and maintain this Electronic Depository Transfer Account. They are also required to provide Boulder Designs with continuous access to the account by signing and returning an ACH Withdrawal Form. The franchisee must instruct their financial institution to comply with these requirements, providing Boulder Designs with copies of the instructions and agreements. The financial institution's agreement cannot be withdrawn or modified without Boulder Designs' written approval.
Boulder Designs may require the franchisee's bank to send monthly statements of account activity directly to them. Franchisees are responsible for making timely deposits to cover amounts owed to Boulder Designs. Once established, the Electronic Depository Transfer Account cannot be closed without Boulder Designs' written consent, and a replacement account must be established if closure is approved. This arrangement ensures that Boulder Designs can efficiently collect royalty fees and other payments from its franchisees.