factual

When are Advances made by the Manager to a C3 Wellness Spa practice due and payable?

C3_Wellness_Spa Franchise · 2024 FDD

Answer from 2024 FDD Document

  • (a) Advances. If there are insufficient funds in the Revenue Account to pay any Practice Expenses or other amounts owed by Practice, Manager may, in its sole discretion, advance funds on behalf of Practice from time to time ("Advance(s)"). Practice expressly grants Manager the authority to make any Advances during the Term without any notice provided by Manager or any further request made by Practice. Manager, however, has no obligation to make any Advance to Practice. Notwithstanding anything to the contrary in this Agreement, all Advances are due and payable upon demand to Practice by Manager. Further, any outstanding Advance plus interest unpaid at the date of termination of this Agreement is due and payable immediately at such date.
  • (b) Interest. Advances will bear interest from the date disbursed by Manager until repaid, at the Interest Rate, compounded daily. Interest on such outstanding amounts will be computed on the basis of a 365- or 366-day year, as the case may be, and for the actual number of days elapsed. Practice promises to pay Manager the sum of all Advances made to Practice and all other amounts due and owing to Manager under this Agreement, plus interest accrued at the Interest Rate on such amounts according to the terms of this Article 3.

Source: Item 23 — RECEIPTS (FDD pages 59–293)

What This Means (2024 FDD)

According to the 2024 C3 Wellness Spa Franchise Disclosure Document, any Advances made by the Manager to the Practice are due and payable upon demand by the Manager. This means that C3 Wellness Spa franchisees must be prepared to repay any advanced funds whenever the Manager requests them.

Furthermore, any outstanding Advance, along with accrued interest, becomes immediately due and payable if the Franchise Agreement is terminated. This could create a significant financial burden for a franchisee upon termination, as they would need to settle the outstanding debt immediately.

The Advances will also bear interest from the date they are disbursed by the Manager until they are repaid. The interest is calculated daily, based on a 365- or 366-day year, depending on whether it is a leap year. The franchisee is responsible for paying both the principal amount of the Advances and the accrued interest according to the terms outlined in Article 3 of the agreement.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.