Can Closet Storage Concepts require payments in any form or manner it prescribes?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
y Franchisor of any change in Franchisee's banking relationship, including changes in account numbers. Franchisor may require that Franchisee execute its then-current form of electronic funds transfer agreement, a copy of which is attached hereto as Exhibit 12. Franchisor reserves the right to require Franchisee to submit all payments due to Franchisor or its affiliates arising out of or related to the Franchised Business in any form or manner Franchisor prescribes. All weekly payments required under this section shall be due and deducted from Franchisee's bank account on Monday of each week on the receipts for the preceding week or such other day as Franchisor mandates. The royalty calculations shall be based on the weekly reports and/or statements signed by Franchisee in the form specified by Franchisor indicating all Gross Revenue (as defined in Section 3.3.2) of Franchisee during the applicable week, which must be submitted to Franchisor on or before the close of business on Monday of each week.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, Closet Storage Concepts reserves the right to require franchisees to submit all payments due to Closet Storage Concepts or its affiliates related to the franchised business in any form or manner that Closet Storage Concepts prescribes.
Closet Storage Concepts also mandates that franchisees participate in an electronic funds transfer program. Under this program, Closet Storage Concepts automatically deducts weekly royalty payments and any other amounts owed to them from the franchisee's bank account. Franchisees are required to sign and provide all necessary documents to facilitate this program before opening their business. They must also notify Closet Storage Concepts immediately of any changes to their banking relationship, including account number changes.
Furthermore, Closet Storage Concepts may require franchisees to execute their current form of electronic funds transfer agreement. All weekly payments are due and will be deducted from the franchisee's bank account on Monday of each week for the receipts of the preceding week, or on another day that Closet Storage Concepts mandates. This gives Closet Storage Concepts significant control over how and when payments are made, ensuring they can enforce their preferred payment methods.