How are fees paid to Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
NOTES:
- (1) All fees are uniformly imposed by and payable only to us or our designee and are payable through Electronic Funds Transfer. Maximum interest permitted in California is 10% annually. You must authorize your bank to accept automatic withdrawals for all fees to us through EFT of the stated amount from your bank into our bank account when due. You must provide us with all documents necessary to direct your bank to honor these pre-authorized bank debits. (See Franchise Agreement, EFT Authorization). All fees are non-refundable.
- (2) The term "Gross Sales" will mean and include the total of all revenue and income from the sale of services and products to clients of the Franchised Business or any other source, whether or not sold or performed at or from the Franchised Business and whether received in cash, in services in kind, from barter and/or exchange, on credit (whether or not payment is received), or otherwise. You will deduct from your Gross Sales (but only if they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, if the taxes are separately stated when the client is charged and if the taxes are paid to the appropriate taxing authority. You will also deduct from your Gross Sales the amount of any documented refunds, charge backs, credits and allowances which you give in good faith to clients. All barter and/or exchange transactions to which Franchised Business furnishes services and/or products in exchange for goods or services to be provided to Franchised Business by a
vendor, supplier or client will, for the purpose of determining Gross Sales, be valued at the full value of the goods and/or services so provided to Franchised Business.
(3) Royalty Fees and Marketing Fund Fees will be calculated based on the Franchised Business' monthly Gross Sales and begin from the date the Franchised Business is opened and continue through the term of the Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, all fees are uniformly imposed and payable only to Cinch I.T. or their designee. Payments are made through Electronic Funds Transfer (EFT), requiring franchisees to authorize their bank to accept automatic withdrawals. This means a prospective franchisee must provide all necessary documentation to allow their bank to honor pre-authorized debits to Cinch I.T.'s bank account. Franchisees in California should note that the maximum interest permitted is 10% annually. All fees paid to Cinch I.T. are non-refundable.
This mandatory EFT payment system ensures that Cinch I.T. receives payments promptly and consistently. Franchisees need to be diligent in managing their accounts to avoid any overdrafts or penalties associated with automatic withdrawals. The non-refundable nature of the fees emphasizes the importance of understanding the terms and conditions before entering into the franchise agreement.
The FDD specifies that Royalty Fees and Marketing Fund Fees are calculated based on the Franchised Business' monthly Gross Sales, starting from the business's opening date and continuing throughout the term of the Franchise Agreement. Gross sales include all revenue and income from the sale of services and products to clients, regardless of whether the sales are in cash, services in kind, or on credit. Franchisees can deduct sales tax receipts and documented refunds from their gross sales, provided these are properly accounted for.
For a prospective Cinch I.T. franchisee, understanding these payment terms is crucial for financial planning and operational management. The EFT system simplifies the payment process but also requires careful monitoring to ensure timely and accurate transfers. The definition of Gross Sales is also important for calculating royalties and other fees accurately. Franchisees should consult with financial advisors to fully understand the implications of these payment terms and how they affect their business operations.