What options does Casiola have regarding the payment schedule for Royalty Fees from the franchisee?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Payment Authorization: Upon the request of Franchisor and in no event not later than 30 days prior to the earlier of the Actual Business Commencement Date or the Scheduled Opening Date, Franchisee shall execute Franchisor's designated ACH Authorization Form and such other authorization agreements, in the form proscribed by Franchisor and permitting Franchisor's direct withdrawal and/or electronic transfer of sums from Franchisee's designated business bank account, for the on-going payment of Royalty Fees, Supplemental Royalty Fees, and, all other fees and sums due from Franchisee under this Agreement. As of the Effective Date, Franchisor's current ACH Authorization that must be executed and complied with by Franchisee is attached to this Agreement as Exhibit 4. Franchisor may require Franchisee to pay the Royalty Fees, Supplemental Royalty Fees, and other amounts due under this Agreement by means other than ACH and/or automatic debit whenever Franchisor deems appropriate, and Franchisee agree' to comply with Franchisor's payment instructions.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, franchisees are generally required to authorize direct withdrawal or electronic transfer of funds for ongoing payments, including Royalty Fees. Specifically, Casiola requires franchisees to execute an ACH Authorization Form, allowing Casiola to directly withdraw sums from the franchisee's designated business bank account for the payment of Royalty Fees, Supplemental Royalty Fees, and all other fees due under the Franchise Agreement. The ACH Authorization Form is included as Exhibit 4 to the agreement.
However, Casiola retains the right to modify the payment method. Casiola may require franchisees to pay Royalty Fees, Supplemental Royalty Fees, and other amounts due via methods other than ACH or automatic debit whenever Casiola deems it appropriate. In such cases, franchisees must comply with Casiola's payment instructions.
This flexibility in payment methods allows Casiola to adapt to changing circumstances or address specific franchisee situations. For a prospective franchisee, this means being prepared to use ACH for regular payments but also being ready to switch to an alternative payment method if Casiola requires it. It is important for franchisees to maintain open communication with Casiola regarding payment procedures to ensure compliance and avoid any potential issues.