Can Crisp & Green require a franchisee to procure overdraft protection for their business checking account in a specified amount?
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, Crisp & Green may require franchisees to procure overdraft protection for their business checking accounts. This is related to the automatic debit program that Crisp & Green may institute for collecting Royalty Fees, National Marketing Fees, and other amounts owed under the Franchise Agreement.
If Crisp & Green implements this automatic debit program, they will debit the franchisee's account on or after the Payment Day, based on the Gross Sales for the previous month. Franchisees must ensure funds are available for withdrawal via electronic transfer before each due date.
As part of this program, Crisp & Green may require franchisees to obtain overdraft protection for their business checking account, and the amount of coverage will be specified by Crisp & Green. Additionally, franchisees are 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.