What is the Cinch I.T. franchisee's obligation regarding the payment of royalties and other amounts owed?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
I (We, if joint account) the undersigned hereby authorize Cinch Franchise, LLC, a limited liability company, with principal offices at 27 West Mountain Street, Worcester, Massachusetts 01606, to initiate electronic transfer of funds out of my (our) primary Checking or Savings selected below at the Financial Institution indicated, for payment of Royalties or other amounts which I may owe Cinch Franchise, LLC. I (We) acknowledge that the origination of Automated Clearing House (ACH) transactions to my (our) account must comply with the provisions of the United States law. All costs and expenses, including any resulting from the dishonor by my (our) bank of any electronic funds transfer, shall be my (our) sole responsibility. This authorization is irrevocable and shall remain in effect until the termination or expiration of the underlying Franchise Agreement with Cinch Franchise, LLC. If I (we) do not have enough money in my (our) account to cover the transfer or if my (our) Financial Institution for any other reason refuses to honor a transfer, I (we) will separately pay for the charges I (we) owe under my (our) Franchise Agreement with Cinch Franchise, LLC**.**
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, franchisees are obligated to pay royalties and other amounts owed to Cinch Franchise, LLC. To facilitate these payments, Cinch I.T. is authorized to initiate electronic fund transfers from the franchisee's designated checking or savings account. This Electronic Funds Transfer (EFT) authorization remains in effect until the termination or expiration of the Franchise Agreement.
The franchisee bears sole responsibility for all costs and expenses, including those resulting from any dishonored electronic funds transfer. Should the franchisee's account lack sufficient funds or if the financial institution refuses to honor a transfer for any reason, the franchisee is obligated to separately pay the charges owed under the Franchise Agreement with Cinch I.T.
This arrangement ensures that Cinch I.T. can collect royalties and other fees efficiently. It also places the onus on the franchisee to maintain sufficient funds and a functional account to cover these payments. The franchisee's authorization for electronic transfers is irrevocable, highlighting the importance of understanding and adhering to the payment terms outlined in the Franchise Agreement.