Can Clean Your Dirty Face deduct any amounts I owe them from the purchase price of my Clean Your Dirty Face business?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
payment, and our charging of the non-compliance fee is not a waiver of any of our other rights and remedies under this Agreement or otherwise.
3.E. APPLICATION OF PAYMENTS.
Despite any designation you make, we may apply any of your payments to us or our affiliates to any of your past due indebtedness to us or our affiliates. We may set off any amounts you or your owners owe us or our affiliates against any amounts we or our affiliates owe you or your owners. You may not withhold payment of any amounts you owe us due to our alleged nonperformance of any of our obligations under this Agreement.
3.F. METHOD OF PAYMENT.
You must make all payments due under this Agreement in the manner we designate from time to time and you agree to comply with all of our payment instructions. You hereby authorize us and/or any third party we designate to debit your business checking account automatically for any or all amounts due under this Agreement (the "EFT Authorization"). You agree to execute and deliver to us any document(s) we require to evidence the EFT Authorization. The EFT Authorization will remain in full force and effect during the term of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, Clean Your Dirty Face has the right to offset debts. Specifically, Clean Your Dirty Face may deduct any amounts that you or your owners owe them or their affiliates from any amounts that Clean Your Dirty Face or its affiliates owe to you or your owners. This applies to debts between you and Clean Your Dirty Face, as well as debts involving their affiliates. This offset can occur regardless of any payment designations you might make.
This means that if you owe Clean Your Dirty Face money for any reason, they can deduct that amount from any payments they owe you. This could include royalties, marketing fund contributions, or any other fees. Conversely, if Clean Your Dirty Face owes you money, they can reduce that amount by any debts you owe them. This right extends to debts involving affiliates of both parties, providing Clean Your Dirty Face with a broad ability to settle accounts by offsetting mutual debts.
Furthermore, upon termination or expiration of the franchise agreement, Clean Your Dirty Face retains the right to offset any amounts you owe them against any amounts they owe you. This ensures that all financial obligations are settled before the franchise relationship concludes. This provision underscores the importance of maintaining good financial standing with Clean Your Dirty Face throughout the term of the agreement, as any outstanding debts can be recovered through offsets against payments owed to you.