What is the franchisee required to comply with regarding payment instructions from Crown Gold Exchange?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
istrative charge to Crown Gold Franchising within 15 days after invoice by Crown Gold Franchising accompanied by reasonable documentation.
4.6 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee and any other amounts owed to Crown Gold Franchising by pre-authorized bank draft or in such other manner as Crown Gold Franchising may require. Franchisee shall comply with Crown Gold Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report monthly Gross Sales to Crown Gold Franchising by the 5th day of the following month. Franchisee acknowledges that Crown Gold Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Crown Gold Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed by law).
- (e) Costs of Collection. Franchisee shall repay any costs incurred by Crown Gold Franchising (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (f) Application. Crown Gold Franchising may apply any payment received from Franchisee to any obligation and in any order as Crown Gold Franchising may determine, regardless of any designation by Franchisee.
- (g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Crown Gold Franchising any fees or amounts described in this Agreement are not dependent on Crown Gol
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, franchisees must adhere to Crown Gold Exchange's payment instructions for Royalty Fees and any other amounts owed. Specifically, the franchisee is required to pay the Royalty Fee and any other amounts owed to Crown Gold Franchising by pre-authorized bank draft or in such other manner as Crown Gold Franchising may require, and shall comply with Crown Gold Franchising's payment instructions.
This means a franchisee does not have a choice in how they remit payment. Crown Gold Exchange has the authority to dictate the payment method, which could include pre-authorized bank drafts or other methods they specify. This gives Crown Gold Exchange control over how they receive payments from franchisees, potentially streamlining their accounting processes and ensuring timely payments.
Furthermore, Crown Gold Exchange has the authority to apply any payment received from the franchisee to any obligation and in any order as Crown Gold Franchising may determine, regardless of any designation by Franchisee. This means that even if a franchisee intends a payment to cover a specific fee or invoice, Crown Gold Exchange can allocate the funds as they see fit. This could impact how outstanding balances are managed and potentially affect the franchisee's financial standing with Crown Gold Exchange.
If a franchisee fails to make payments on time, they will incur a $100 late fee plus interest on the unpaid amount at a rate of 18% per year (or the highest rate allowed by law). Additionally, Crown Gold Exchange may charge $30 for any payment returned due to insufficient funds (or the maximum fee allowed by law). The franchisee is also responsible for repaying any costs incurred by Crown Gold Franchising, including reasonable attorney fees, in attempting to collect payments owed by the franchisee. These terms highlight the importance of franchisees maintaining sufficient funds and adhering to the payment schedule to avoid additional charges and potential legal action.