Does Byrider's acceptance of late payments constitute an agreement to accept future late payments or an extension of credit to the Byrider franchisee?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. All Royalties, Advertising Fees and other amounts that the Franchisee owes to the Company or its affiliates shall bear interest after the due date at the highest legal rate for open account business credit. The Franchisee acknowledges that this paragraph shall not constitute an agreement by the Company or its affiliates to accept such payments after the same are due or a commitment by the Company to extend credit to or otherwise finance the Franchisee's operations of the Franchisee's Business. Acceptance by the Company of any payment by the Franchisee in an amount less than the full amount due shall not constitute acceptance as payment in full and shall not constitute a waiver of any amounts remaining due to the Company. Further, the Franchisee acknowledges that its failure to pay all amounts when due shall constitute grounds for termination of this Agreement as provided herein notwithstanding the provisions of this paragraph.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the acceptance of late payments does not constitute an agreement to accept future late payments or an extension of credit to the franchisee. The FDD clearly states that Byrider's acceptance of late payments does not obligate them to accept future late payments, nor does it represent a commitment to extend credit or finance the franchisee's operations. This protects Byrider from being forced to continue accepting payments after their due date.
Furthermore, the document specifies that if a franchisee owes money to Byrider or its affiliates, such as royalties or advertising fees, these amounts will accrue interest at the highest legal rate for open account business credit after the due date. This provision incentivizes timely payments and compensates Byrider for the delay in receiving funds. However, even with the accrual of interest, Byrider is not obligated to accept these late payments, and failure to pay on time can still be grounds for termination of the franchise agreement.
Finally, Byrider retains the discretion to apply any payments received from the franchisee to any outstanding debts, regardless of how the franchisee intended the payment to be applied. If Byrider applies a payment differently than the franchisee's intention, they will provide written notice to the franchisee. This ensures that Byrider can prioritize the repayment of older debts and maintain control over the allocation of funds received, while still informing the franchisee of the payment application.