Under what conditions can the Manager advance funds to a C3 Wellness Spa practice?
C3_Wellness_Spa Franchise · 2024 FDDAnswer 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, the Manager has the option to advance funds to a C3 Wellness Spa practice if there are insufficient funds in the Revenue Account to cover Practice Expenses or other amounts owed by the Practice. This is done at the Manager's discretion, and the Practice grants the Manager the authority to make these advances without needing to provide notice or request further approval. However, the Manager is not obligated to provide any Advances.
Any funds advanced by the Manager will accrue interest from the date they are disbursed until they are repaid. The interest is calculated daily based on the Interest Rate, using a 365- or 366-day year for the actual number of days elapsed. The Practice is responsible for paying back all Advances, plus the accrued interest, according to the terms outlined in Article 3 of the agreement.
All Advances, including any unpaid interest, become immediately due and payable if the Franchise Agreement is terminated. The FDD also outlines a payment priority schedule, detailing how funds in the Revenue Account are to be applied each month. Repaying the Manager for Advances takes precedence after Practice Professional Compensation and Practice Expenses are covered.