Does Burneys Sweets More have the right to offset amounts it owes to a Burneys Sweets More franchisee?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
Failure by Franchisee to have sufficient funds in the Account shall constitute a default of this Agreement and may subject this Agreement to termination for cause as hereinafter set forth.
- (c) Application of Fees. If Franchisee is delinquent in the payment of any obligation to Franchisor, its affiliates or designees, then Franchisor (or such affiliates or designees), will have the right to apply any payment from Franchisee to any obligat
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More FDD, Burneys Sweets More has the right to apply any payment from a franchisee to any obligation the franchisee owes to Burneys Sweets More, its affiliates, or designees if the franchisee is delinquent in payment. This means that if a Burneys Sweets More franchisee owes money to Burneys Sweets More for any reason, Burneys Sweets More can use any payment it owes the franchisee to offset that debt.
This is a significant right for Burneys Sweets More, as it allows them to ensure they receive all payments due from franchisees. It also means that a franchisee may not receive payments they expect from Burneys Sweets More if they have outstanding debts. The FDD specifies that this applies to obligations to Burneys Sweets More, its affiliates, or designees, indicating a broad scope of potential offsets.
For a prospective Burneys Sweets More franchisee, this highlights the importance of staying current on all payments owed to Burneys Sweets More and related parties. Failure to do so could result in Burneys Sweets More using owed payments to cover those debts, potentially impacting the franchisee's cash flow. This clause is fairly standard in franchise agreements, as it protects the franchisor's financial interests and ensures compliance with payment obligations.