What documents related to electronic funds transfer must a Chicken Guy franchisee sign before opening?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) In connection with payment of the royalty fee by electronic funds transfer, Franchisee shall no later than 30 days prior to opening the Franchised Restaurant: (a) comply with procedures specified by Chicken Guy in the Manual or otherwise in writing; (b) perform those acts and sign and deliver those documents (including the ACH Authorization form attached as Exhibit C) as may be necessary to accomplish payment by electronic funds transfer as described in this Section 7.F.; (c) designate an account at a commercial bank and furnish to Chicken Guy an authorization in the form designated by Chicken Guy to initiate debit entries and/or credit correction entries to the Account for payments of the royalty fee and other amounts payable under this Agreement, including any interest charges; and (d) make sufficient funds available in the Account for withdrawal by electronic funds transfer no later than the Due Date for payment thereof.
(2) Franchisee is current on all obligations due Chicken Guy and Franchisee has signed all documents required by Chicken Guy to participate in Chicken Guy's electronic funds transfer program.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, a franchisee must sign documents related to electronic funds transfer (EFT) before opening their restaurant. Specifically, the franchisee must perform required actions and sign/deliver necessary documents, including the ACH Authorization form attached as Exhibit C, no later than 30 days before opening. These actions are necessary to facilitate royalty fee payments via electronic funds transfer. The franchisee must also designate a commercial bank account and authorize Chicken Guy to initiate debit and credit entries for royalty fees and other amounts owed under the Franchise Agreement, including interest charges.
Chicken Guy requires participation in its electronic funds transfer program, which authorizes them to use a pre-authorized bank draft system. This system ensures that all royalty fees and other amounts, including advertising fees and interest charges, are received by Chicken Guy by 5:00 p.m. on the 5th day after the end of each fiscal week, or another specified date. Chicken Guy will transfer the reported or estimated amount from the franchisee's commercial bank operating account.
Failure to comply with these electronic funds transfer requirements or maintain sufficient funds in the designated account constitutes a default under the Franchise Agreement. Chicken Guy also retains the right to modify the payment method for royalty fees and other amounts upon written notice. Before Chicken Guy authorizes the opening of the franchised restaurant, the franchisee must be current on all obligations and have signed all required documents for the electronic funds transfer program.