What happens if a Desi District franchisee does not have sufficient funds for an electronic funds withdrawal?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
(a) Subject to 10-Day Cure Period. Desi District Franchise Group may terminate this Agreement if Franchisee does not make any payment to Desi District Franchise Group when due, or if Franchisee does not have sufficient funds in its account when Desi District Franchise Group attempts an electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Desi District Franchise Group gives notice to Franchisee of such breach.
- (d) Insufficient Funds. Desi District Franchise Group 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 Desi District Franchise Group (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (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,
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, if a franchisee does not have sufficient funds in their account when Desi District attempts an electronic funds withdrawal, it constitutes a breach of the franchise agreement. Desi District may terminate the agreement if the franchisee fails to cure the non-payment within 10 days after receiving notice of the breach from Desi District.
In addition to potential termination, Desi District may charge a $30 fee for any payment returned due to insufficient funds, unless the maximum fee allowed by law is less than $30, in which case the legally allowed fee will be charged. The franchisee is also responsible for repaying any costs incurred by Desi District in attempting to collect payments owed, including reasonable attorney fees.
Furthermore, if a Desi District franchisee does not make a payment on time, they will incur a $100 late fee, along with interest on the unpaid amount at a rate of 18% per year, or the highest rate allowed by law if that is lower. These financial repercussions and the risk of potential termination highlight the importance of maintaining sufficient funds to cover all payments to Desi District as a franchisee.