When will Crisp & Green debit the franchisee's account for royalties and other amounts?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
You must sign and deliver to us the documents that we periodically require to authorize us to debit your business checking account automatically for the Royalty, National Marketing Fee, and other amounts due under the Franchise Agreement or any related agreement between us (or our affiliates) and you. If we institute an automatic debit program for the Franchised Restaurant, we will debit your account for the Royalty and other amounts on or after the Payment Day, based on the Gross Sales for the previous month. You must make the funds available for withdrawal by electronic transfer before each due date. In our automatic debit program, we may require you to procure, at your expense, overdraft protection for your business checking account in an amount that we specify. You must reimburse us for any "insufficient funds" charges and related expenses that we incur for any checks that we receive from you or your failure to maintain sufficient funds in your automatic debit account.
Source: Item 6 — OTHER FEES (FDD pages 15–22)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, franchisees must authorize the company to automatically debit their business checking account for royalties, national marketing fees, and other amounts due under the Franchise Agreement. Crisp & Green will debit the franchisee's account on or after the Payment Day, based on the Gross Sales for the previous month. The franchisee is responsible for ensuring funds are available for withdrawal via electronic transfer before each due date.
As part of the automatic debit program, Crisp & Green may require franchisees to obtain overdraft protection for their business checking account, with the specific amount to be determined by Crisp & Green. Franchisees are also responsible for reimbursing Crisp & Green for any "insufficient funds" charges and related expenses incurred due to returned checks or failure to maintain sufficient funds in the automatic debit account.
This automatic debit system is a fairly standard practice in franchising, designed to ensure timely payments of royalties and fees. Franchisees should carefully manage their cash flow to avoid insufficient fund situations and associated penalties. Understanding the Payment Day and ensuring sufficient funds are available is crucial for maintaining a good financial standing with Crisp & Green.