What is the Chocolate Fish Coffee franchisee's obligation regarding electronic fund withdrawals?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
4.7 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee, Brand Fund Contribution, and any other amounts owed to Chocolate Fish Franchising by pre-authorized bank draft or in such other manner as Chocolate Fish Franchising may require. Franchisee shall comply with Chocolate Fish Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report weekly Gross Sales to Chocolate Fish Franchising by Monday of the following week. If Franchisee fails to report weekly Gross Sales, then Chocolate Fish Franchising may withdraw estimated Royalty Fees and Brand Fund Contributions equal to 125% of the last Gross Sales reported to Chocolate Fish Franchising, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Chocolate Fish Franchising has the right to remotely access Franchisee's pointof-sale system to c
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees are obligated to make payments via pre-authorized bank drafts or any other method that Chocolate Fish Coffee may require. Franchisees must also adhere to Chocolate Fish Coffee's specific payment instructions. This includes the royalty fee, brand fund contribution, and any other amounts owed to Chocolate Fish Coffee.
Furthermore, Chocolate Fish Coffee franchisees are required to report their gross sales weekly, by Monday of the following week. If a franchisee fails to report their weekly gross sales, Chocolate Fish Coffee has the right to withdraw estimated royalty fees and brand fund contributions equal to 125% of the last gross sales reported. After the franchisee reports gross sales, the parties will then reconcile the actual fees due.
Chocolate Fish Coffee also retains the right to remotely access the franchisee's point-of-sale system to ensure accurate sales reporting and fee calculation. This remote access provision underscores the importance of accurate and timely reporting by the franchisee, as well as Chocolate Fish Coffee's ability to verify sales data independently.