What right does Closet Storage Concepts reserve regarding payment methods from franchisees?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.4.4 All amounts to be paid by Franchisee to Franchisor and/or its affiliates are currently paid, and no default under this Agreement exists uncured five (5) days after the Franchisee has received written notice of any overdue amounts.
Even if no such default exists, Franchisor may revoke said option and refuse to allow said renewal if, during the initial term of this Agreement, Franchisee has been in material default of this Agreement.
Franchisor and Franchisee agree that, for the purposes of this Section, such material default includes, but is not limited to, failure to make one hundred percent (100%) of all payments and submit reports within fifteen (15) days of the date they are actually due.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Closet Storage Concepts outlines several stipulations regarding payments from franchisees. While the document does not explicitly state that Closet Storage Concepts reserves the right to dictate payment methods, it does state that all amounts to be paid by the franchisee to Closet Storage Concepts and/or its affiliates are currently paid, and no default exists if amounts are uncured five days after written notice of overdue amounts.
Closet Storage Concepts can revoke a franchisee's option to renew their agreement and refuse renewal if the franchisee has been in material default during the initial term. This material default includes failing to make 100% of all payments and submit reports within 15 days of the date they are actually due. This clause emphasizes the importance of timely and complete payments to Closet Storage Concepts to maintain good standing and renewal eligibility.
Prospective franchisees should clarify with Closet Storage Concepts what specific payment methods are acceptable (e.g., check, electronic transfer, credit card) and whether there are any preferred methods. Understanding these details upfront will help ensure compliance with the franchise agreement and avoid potential defaults or penalties.