What happens if the Face Foundrie franchisee fails to pay amounts owed when due?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) Franchisee fails to pay when due any amount owed to Franchisor or its Affiliates, whether under this Agreement or not, and Franchisee does not correct such failure within five (5) days after written notice thereof is delivered to Franchisee;
6.05 Late Payments and Insufficient Funds. All overdue payments for fees required to be paid hereunder shall bear interest from the date due at the rate specified by Franchisor from time to time, up to the highest rate permitted by law, but in no event shall such rate exceed one and one-half percent (1½%) per month. Interest shall accrue on all late payments regardless of whether Franchisor exercises its right to terminate this Agreement as provided for herein. In addition to its right to charge interest as provided herein, Franchisor may charge Franchisee a $50 late payment fee for all such overdue payments and a $30 insufficient funds fee for each check, automated bank draft payment, or other payment method that is not honored by Franchisee's financial institution.
6.06 Application of Payments. Notwithstanding designation by Franchisee to the contrary, all payments made by Franchisee hereunder will be applied by Franchisor at its discretion to any of Franchisee's past due amounts. Franchisee acknowledges that Franchisor has the right to set-off amounts Franchisee owes Franchisor against any amounts Franchisor may owe Franchisee. Franchisee agrees not to set off or withhold payment of any monthly or other amounts due to Franchisor or its Affiliates, due to the nonperformance or alleged nonperformance by Franchisor of any of its obligations hereunder.
19.06 Costs and Attorneys' Fees. If Franchisor incurs any expenses in connection with Franchisee's failure to pay any amounts it owes when due, submit any required reports when due or otherwise comply with this Agreement, Franchisee agrees to reimburse Franchisor for any of the costs and expenses that Franchisor incurs, including, without limitation, reasonable accounting, attorneys', arbitrators' and related fees.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, several consequences can arise if a franchisee fails to make payments on time. Face Foundrie can charge interest on overdue payments, accruing from the date the payment was due. This interest rate is determined by Face Foundrie but will not exceed 1.5% per month or the highest rate permitted by law. Additionally, Face Foundrie may impose a $50 late payment fee for each overdue payment and a $30 insufficient funds fee for any payment method that is not honored by the franchisee's bank.
Face Foundrie has the discretion to apply any payments made by the franchisee to past due amounts, regardless of any specific designation made by the franchisee. The franchisee is prohibited from setting off or withholding payments due to Face Foundrie or its affiliates, even in cases of alleged non-performance by Face Foundrie. Furthermore, if Face Foundrie incurs any expenses due to the franchisee's failure to pay, submit required reports, or comply with the Franchise Agreement, the franchisee is responsible for reimbursing Face Foundrie for all associated costs, including accounting, attorneys', and arbitrators' fees.
Moreover, failure to pay amounts owed to Face Foundrie or its Affiliates when due, and not correcting this failure within five days after receiving written notice, constitutes a breach of the Franchise Agreement. This can lead to Face Foundrie terminating the agreement. Upon termination or expiration of the agreement, the franchisee must pay all outstanding amounts, including unpaid Royalty Fees, Marketing Contributions, Technology Fees, and amounts owed for purchases, along with any interest and late fees. If the termination results from the franchisee's default, the franchisee will also be liable for all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Face Foundrie.