What is the purpose of the Authorization Agreement for Preauthorized Payments for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned depositor ("Franchisee") agrees to electronic funds transfer from Franchisee's account designated below to the designated account(s) of Floyd's 99 Franchising, LLC ("Franchisor") for payment of Royalties, National Marketing Contributions, and other obligations owed to Franchisor related to Franchisee's FLOYD'S 99 franchise(s).
Franchisee authorizes and requests the financial institution (the "Bank") to accept the payment entries presented to the Bank by Franchisor, and to deduct them from the Franchisee's account without responsibility for the correctness of these payments.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Authorization Agreement for Preauthorized Payments, also known as the Electronic Funds Transfer Authorization, allows Floyds 99 Franchising, LLC to electronically withdraw funds from the franchisee's designated bank account. This agreement facilitates the payment of royalties, national marketing contributions, and any other financial obligations the franchisee owes to Floyds 99 related to their franchise.
By signing this agreement, the Floyds 99 franchisee authorizes their bank to accept payment entries submitted by Floyds 99 Franchising, LLC. The bank is then instructed to deduct these payments from the franchisee's account without being held responsible for verifying the accuracy of the payment amounts. This arrangement streamlines the payment process, ensuring that Floyds 99 receives timely payments of royalties and other fees.
This type of electronic funds transfer authorization is a fairly standard practice in franchising. It provides convenience and efficiency for both the franchisor and franchisee by automating payments and reducing administrative overhead. However, it's crucial for a prospective Floyds 99 franchisee to carefully review the terms of the agreement and understand exactly what payments will be debited from their account and on what schedule. Franchisees should also ensure they have sufficient funds in their account to cover these payments to avoid any potential penalties or disruptions.