What is the Chocolate Fish Coffee franchisee's obligation regarding maintaining sufficient funds for electronic withdrawals?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
nistrative charge to Chocolate Fish Franchising within 15 days after invoice by Chocolate Fish Franchising accompanied by reasonable documentation.
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 calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Chocolate Fish Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed
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 ensure they have sufficient funds available for pre-authorized bank drafts or other payment methods required by Chocolate Fish Coffee. This is because the Royalty Fee, Brand Fund Contribution, and any other amounts owed to Chocolate Fish Coffee will be collected via these electronic methods. If a payment is returned due to insufficient funds, Chocolate Fish Coffee may charge a $30 fee (or the maximum amount allowed by law).
If a Chocolate Fish Coffee franchisee fails to report their weekly Gross Sales, Chocolate Fish Franchising has the right to withdraw estimated Royalty Fees and Brand Fund Contributions equal to 125% of the last Gross Sales reported. Franchisees acknowledge that Chocolate Fish Coffee has the right to remotely access the franchisee's point-of-sale system to calculate Gross Sales.
Furthermore, if a franchisee does not make payments on time, they will incur a $100 late fee plus interest on the unpaid amount at a rate of 18% per year (or the highest rate allowed by law). Chocolate Fish Coffee also has the right to recover any costs incurred while attempting to collect payments owed by the franchisee, including reasonable attorney fees. These terms highlight the importance of maintaining sufficient funds and adhering to the payment terms outlined in the franchise agreement to avoid additional fees and potential legal action.