Can Chocolate Fish Coffee franchisees designate how their payments are applied?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (f) Application. Chocolate Fish Franchising may apply any payment received from Franchisee to any obligation and in any order as Chocolate Fish Franchising may determine, regardless of any designation by Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees do not have the right to designate how their payments are applied. Chocolate Fish Coffee has the authority to apply payments in any order it chooses, regardless of any specific instructions or preferences the franchisee might express.
This means that Chocolate Fish Coffee can decide which outstanding obligations a franchisee's payment will cover, such as royalty fees, brand fund contributions, or other debts. This could impact a franchisee if they have multiple outstanding balances and prefer to allocate their payment to a specific debt.
For a prospective Chocolate Fish Coffee franchisee, this highlights the importance of maintaining timely payments and understanding the potential implications of any outstanding balances. Franchisees should be aware that Chocolate Fish Coffee has full discretion over payment allocation, which could affect their financial standing with the franchisor.