What program must a Churchs Chicken franchisee participate in regarding electronic funds transfer?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisee shall participate in an electronic funds transfer program established by Cajun that authorizes Cajun to utilize a pre-authorized bank draft system.
The Royalty Fee and advertising contributions calculated on the basis of Gross Sales and other amounts owed under this Agreement must be received by Cajun or credited to Cajun's account by pre-authorized bank debit before 5:00 p.m. on the 5th business day after the end of each fiscal week ("Due Date").
On each Due Date, Cajun will transfer from the Franchised Restaurant's commercial bank operating account ("Account") the amount reported to Cajun in Franchisee's remittance report or determined by Cajun by the records contained in the cash registers/computer terminals of the Franchised Restaurant.
If Franchisee has not reported Gross Sales to Cajun for any fiscal period, Cajun may transfer from the Account an amount calculated in accordance with its estimate of the Gross Sales during the fiscal period.
If, at any time, Cajun determines that Franchisee has underreported the Gross Sales of the Franchised Restaurant, or underpaid the Royalty Fee or other amounts due to Cajun under this Agreement or any other agreement, Cajun may initiate an immediate transfer from the Account in the appropriate amount in accordance with the foregoing procedure.
Any overpayment will be credited to the Account effective as of the first reporting date after Cajun and Franchisee determine that such credit is due.
- (3) In connection with payment of the Royalty Fee, advertising contributions and other amounts owed under this Agreement by electronic funds transfer, Franchisee shall: (a) comply with procedures specified by Cajun in the Manual or otherwise in writing; (b) perform those acts and sign and deliver those documents as may be necessary to accomplish payment by electronic funds transfer as described in this Section 3.F.; (c) give Cajun an authorization in the form designated by Cajun 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; and (d) make sufficient funds available in the Account for withdrawal by electronic funds transfer no later than the Due Date for payment thereof.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, franchisees are required to participate in an electronic funds transfer (EFT) program established by Cajun. This program authorizes Cajun to utilize a pre-authorized bank draft system for collecting Royalty Fees, advertising contributions, and any other amounts owed under the Franchise Agreement. These payments must be received or credited to Cajun's account via pre-authorized bank debit by 5:00 p.m. on the 5th business day after the end of each fiscal week, referred to as the "Due Date."
On each Due Date, Cajun will transfer the reported or determined amount from the franchisee's commercial bank operating account. If a franchisee fails to report Gross Sales for any fiscal period, Cajun reserves the right to estimate the Gross Sales and transfer an amount based on that estimate. Furthermore, if Cajun determines that a franchisee has underreported Gross Sales or underpaid any amounts due, Cajun can initiate an immediate transfer from the franchisee's account to cover the deficiency. Any overpayments will be credited back to the franchisee's account on the first reporting date after the credit is acknowledged.
As part of participating in the EFT program, Churchs Chicken franchisees must comply with procedures specified by Cajun in the manual or in writing. They must also execute necessary documents to facilitate payment via electronic funds transfer and provide Cajun with authorization to debit their account for Royalty Fees and other amounts payable under the Franchise Agreement. Franchisees are responsible for ensuring sufficient funds are available in their account for withdrawal by the Due Date.