Will Eriks Delicafe franchisees be reimbursed for charges assessed to Eriks due to insufficient funds in the franchisee's account?
Eriks_Delicafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Erik's, which may include payment by electronic funds transfer from a designated bank account of Franchisee to a designated bank account of Erik's, or payment by some other electronic debit/credit method. Franchisee agrees to execute any forms or agreements required by banks or financial institutions to authorize transfers, whether initiated by Erik's or Franchisee. Franchisee is responsible for having sufficient funds on deposit to cover all checks, debits and electronic funds transfers made. All charges imposed by Franchisee's bank or financial institution to process and clear any checks, debits or transfers shall be paid by Franchisee. Franchisee will also reimburse Erik's for any charges assessed to Erik's due to Franchisee's account having insufficient funds to cover any check, debit or funds transfer or for any "stop payment' or other refusal to honor or pay a check, debit or funds transfer to Erik's.
Source: Item 23 — RECEIPTS (FDD pages 38–159)
What This Means (2024 FDD)
According to Eriks Delicafe's 2024 Franchise Disclosure Document, franchisees are responsible for reimbursing Eriks Delicafe for any charges assessed to Eriks Delicafe due to the franchisee's account having insufficient funds. This includes covering checks, debits, or funds transfers that are declined due to insufficient funds, as well as any 'stop payment' or refusal to honor a payment to Eriks Delicafe.
This means that if an Eriks Delicafe franchisee's payment to Eriks Delicafe is rejected due to insufficient funds, the franchisee will not only need to cover the original payment but also any additional fees or charges that Eriks Delicafe incurs as a result of the failed transaction. This policy ensures that Eriks Delicafe is not financially penalized due to issues with a franchisee's account.
For a prospective Eriks Delicafe franchisee, this highlights the importance of maintaining sufficient funds in the designated bank account to cover all payments to Eriks Delicafe. Franchisees should also be aware of their bank's policies regarding overdraft fees and other charges related to insufficient funds, as they will ultimately be responsible for these costs in addition to the original payment owed to Eriks Delicafe.