Under what circumstances will Extreme Art Studio debit a franchisee's bank account automatically?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
expressly provided otherwise, all fees or payments made by Franchisee to Franchisor under this Franchise Agreement are non-refundable under any circumstances.
3.9 METHOD OF PAYMENT.
3.9.1 You hereby authorize us to debit the business checking account you designate automatically for the Royalty, technology fee, Brand Fund Contribution and other amounts due under this Franchise Agreement ("EFT Authorization"). Such EFT Authorization will remain in full force and effect during the term of this Franchise Agreement. You agree to execute any documents we require for the EFT Authorization. We have the right to periodically specify (in the Franchise Operations Manual or otherwise in writing) different payees and/or payment methods, such as, but not limited to, weekly or monthly payment, payment by auto-draft, credit card, and payment by check. You shall not subordinate to any other obligation its obligation to pay the Royalty or any other fee or charge due to us or our affiliate under this Franchise Agreement.
- 3.9.2 We may require you to remit fees and other amounts due to us under this Franchise Agreement via EFT or other similar means utilizing an approved computer system or otherwise. You agree to comply with our procedures and/or perform such acts and deliver and execute such documents as may be necessary to assist in or accomplish payment by such method.
- 3.9.3 We may receive information regarding your Gross Sales through the Computer System. If we ever cease to have access to this information, and you fail to report your Gross Sales when due, we may debit your designated account for an estimated Royalty and Brand Fund Contribution (as defined in Section 9.3) on the date it is due.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, Extreme Art Studio is authorized to debit a franchisee's bank account automatically for several reasons. The franchisee authorizes Extreme Art Studio to debit their designated business checking account for Royalty fees, technology fees, Brand Fund Contributions, and any other amounts due under the Franchise Agreement. This authorization remains in effect throughout the term of the Franchise Agreement.
Additionally, Extreme Art Studio may debit a franchisee's bank account automatically for service charges and interest in the event of overdue amounts. Any payment not made by the due date is considered overdue, and interest will be charged on the overdue amount from the date it was due until it is paid. The interest rate will be the lesser of 18% per year or the highest amount allowed by law.
It is important to note that this debit authorization is not an agreement by Extreme Art Studio to accept late payments or to extend credit to the franchisee. The franchisee is responsible for ensuring timely payments to avoid these automatic debits and associated fees.