What happens if a Buona franchisee's ACH payment is not honored by their bank?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay for all purchases from, or fees owed to Franchisor or its Affiliates by automated clearing house ("ACH"), as Franchisor may require, or by other means as set forth in this Agreement or in the Manuals.
Franchisor or its Affiliates shall have the right to withdraw the entire amount of any amounts owed to Franchisor or its Affiliates from Franchisee's designated bank account ("ACH Account") in accordance with the terms set forth in the Manuals, as modified by Franchisor periodically.
Franchisee shall, upon execution of this Agreement or any time after at Franchisor's request, execute all documents or forms as Franchisor determines are necessary for Franchisor to process ACH withdrawals from Franchisee's ACH Account for payments due, including the ACH Authorization Form attached hereto as Exhibit C. Franchisee agrees that it shall be responsible for any ACH transfer fee or similar charge imposed by the bank.
Should any ACH not be honored by Franchisee's bank for any reason, Franchisee shall be responsible for that payment plus any service charge applied by Franchisor and the bank.
Franchisee agrees that any time an ACH transaction is not honored, Franchisee shall pay to Franchisor its then-current non-sufficient funds fee.
Franchisee's failure to maintain, at all times, an ACH Account in accordance with this Agreement shall be a material default of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are required to make payments via Automated Clearing House (ACH) for purchases and fees owed to Buona or its affiliates. If an ACH payment is not honored by the franchisee's bank for any reason, the franchisee is responsible for the original payment amount, plus any service charges applied by both Buona and the bank. Additionally, Buona specifies that the franchisee must pay the then-current non-sufficient funds (NSF) fee.
Furthermore, the FDD states that failure to maintain an ACH account at all times, in accordance with the franchise agreement, constitutes a material default of the agreement. This means that consistently having issues with ACH payments could lead to serious consequences, potentially including termination of the franchise agreement.
This policy highlights the importance of franchisees maintaining sufficient funds in their designated bank accounts to cover all payments to Buona. Franchisees should also be aware of all potential fees associated with failed ACH transfers to avoid additional charges and potential default on their franchise agreement.