What obligations does the Buns On Fire franchisee have regarding the Irrevocable Power of Attorney?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
5.9 Set Off Option
Franchisor may set off against any money owed by Franchisor or Franchisor's Affiliate(s) to Franchisee or Franchisee's Affiliate(s) pursuant to this Agreement or otherwise. This right to set off will continue until Franchisee has paid, satisfied or discharged all monies, debts or liabilities due or owing to Franchisor and Franchisor's Affiliates. Franchisee hereby irrevocably authorizes Franchisor or Franchisor's Affiliate to deduct from any monies payable by Franchisor or Franchisor's Affiliate to Franchisee or Franchisee's Affiliate(s) pursuant to this Agreement or otherwise any monies due or owing to Franchisor or Franchisor's Affiliates by Franchisee or Franchisee's Affiliate from time to time. If in Franchisee's jurisdiction set-off is not possible due to the local laws Franchisor or Franchisor's Affiliate(s) will hold
monies due to Franchisee or Franchisee's Affiliate as a lien, free from interest, until such time as Franchisee or Franchisee's Affiliate(s) have paid all monies owed by Franchisee or Franchisee's Affiliate to Franchisor or Franchisor's Affiliate(s).
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Buns On Fire has the option to set off against any money owed to the franchisee or the franchisee's affiliates. The franchisee irrevocably authorizes Buns On Fire or its affiliates to deduct from any monies payable to the franchisee or its affiliates any monies due or owing to Buns On Fire or its affiliates.
This right of set-off continues until the franchisee has paid all debts and liabilities to Buns On Fire and its affiliates. If set-off is not possible in the franchisee's jurisdiction due to local laws, Buns On Fire or its affiliates will hold monies due to the franchisee as a lien, free from interest, until all debts are paid.
This clause ensures that Buns On Fire can recover any outstanding debts from the franchisee by deducting them from any payments owed to the franchisee, providing a financial safeguard for the franchisor. The lien provision further protects Buns On Fire's financial interests in jurisdictions where direct set-off is prohibited.