What does the franchisee authorize Face Foundrie to charge to the credit card on file?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall also execute an Electronic Funds Withdrawal and Credit Card Authorization, which is attached as Exhibit D to this Agreement (which also includes a credit card authorization in favor of Franchisor authorizing Franchisor to charge all amounts Franchisee or its affiliates owe to Franchisor under this Agreement or any other agreement between Franchisee and its affiliates and Franchisor), and give copies to Franchisee's bank and to Franchisor.
Franchisee shall immediately notify Franchisor of any change in Franchisee's banking relationship, including changes in
account numbers. Franchisor reserves the right to require Franchisee to pay any fees due under this Agreement by other means Franchisor may specify from time to time. If Franchisee does not report Gross Sales in the time period required by Franchisor, Franchisor may process an automated bank draft (or other method used by Franchisor to collect funds) based on one hundred twenty percent (120%) of the last Royalty Fee, Marketing Contribution, and other fees that Franchisor collected. If the Royalty Fee, Marketing Contribution, and other amounts Franchisor collects are less than the fees Franchisee actually owes Franchisor, Franchisor will debit Franchisee's account for the balance on a day Franchisor specifies. If the Royalty Fee, Marketing Contribution, and other amounts Franchisor debits are greater than the fees Franchisee actually owes Franchisor, Franchisor will credit the excess against the amount Franchisor otherwise would debit from Franchisee's account during the following month.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, as part of the franchise agreement, the franchisee is required to authorize Face Foundrie to charge their credit card on file for various amounts. Specifically, the franchisee authorizes Face Foundrie to charge all amounts that the franchisee or its affiliates owe to Face Foundrie under the Franchise Agreement or any other agreement between the franchisee (or its affiliates) and Face Foundrie. This authorization is formalized through an Electronic Funds Withdrawal and Credit Card Authorization form, which is included as an exhibit to the Franchise Agreement.
This provision ensures that Face Foundrie has a mechanism to collect fees and other amounts owed by the franchisee. It covers not only the standard royalty and marketing fees but also any other financial obligations that may arise during the course of the franchise relationship. The franchisee must provide their bank details and a voided check to Face Foundrie at least 30 days before opening their Facial Bar, and they must also keep Face Foundrie informed of any changes to their banking relationship.
Furthermore, if the franchisee fails to report Gross Sales in the required time period, Face Foundrie is authorized to process an automated bank draft (or use another method to collect funds) based on 120% of the last Royalty Fee, Marketing Contribution, and other fees collected. If this amount is less than what the franchisee actually owes, Face Foundrie will debit the account for the balance. Conversely, if the amount debited is greater than what is owed, Face Foundrie will credit the excess against the following month's debit. This highlights the importance of timely and accurate reporting of Gross Sales by the franchisee to avoid potentially inaccurate charges and subsequent reconciliation.
For a prospective franchisee, this means they must be prepared to grant Face Foundrie broad authorization to charge their credit card for any amounts owed under the franchise agreement. It is crucial to understand all the potential fees and obligations outlined in the agreement to avoid unexpected charges. Franchisees should also maintain meticulous records of their Gross Sales and promptly report them to Face Foundrie to ensure accurate fee calculations and avoid estimated charges. Additionally, franchisees should carefully review the Electronic Funds Withdrawal and Credit Card Authorization form to fully understand the scope of the authorization they are granting.