Can Burneys Sweets More transfer funds from the franchisee's account for underpaid amounts?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
If, at any time, Franchisor determines that Franchisee has underreported its Gross Sales, or underpaid the Royalty or other amounts due to Franchisor under this Agreement, or any other agreement, Franchisor may initiate an immediate transfer from the Account in the appropriate amount in accordance with the foregoing procedure, including interest as provided in this Agreement.
Any overpayment will be credited to the Account effective as of the first reporting date after Franchisor and Franchisee determine that such credit is due.
Alternatively, Franchisor shall have the right in lieu of the Royalty report submission procedure outlined above to obtain the Gross Sales directly from electronic communication with Franchisee's point-of-sale system.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Burneys Sweets More's 2025 Franchise Disclosure Document, Burneys Sweets More has the right to transfer funds from a franchisee's bank operating account under specific circumstances. If Burneys Sweets More determines that a franchisee has underreported gross sales or underpaid royalties or other amounts due under the Franchise Agreement or any other agreement, Burneys Sweets More may initiate an immediate transfer from the franchisee's account to cover the underpaid amount, including interest.
This provision in the franchise agreement allows Burneys Sweets More to ensure accurate and timely payment of fees and royalties. It also protects Burneys Sweets More from potential losses due to underreporting or underpayment by franchisees. Franchisees should be aware of this clause and maintain accurate records of their gross sales and payments to avoid any discrepancies.
If a transfer from the franchisee's account is refused, Burneys Sweets More may assess an administrative fee of $25, as well as reimbursement for any fees its bank charges for uncollected deposit funds. Any overpayment will be credited to the franchisee's account effective as of the first reporting date after Burneys Sweets More and the franchisee determine that such credit is due.