What system can Hck Hot Chicken implement if a franchisee is frequently delinquent in payments?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
the software is not functioning, or this feature is not available, Franchisee shall prepare and submit the required reports manually.
4.6 EFT and Pre-Authorized Payments.
4.6.1 Franchisee, at Franchisee's sole cost and expense, shall instruct its bank to paythe amount of its Continuing Royalty, Brand Fund Contribution and other fees directly to Franchisor from Franchisee's account, by electronic funds transfer or such other automatic payment mechanism which Franchisor may designate ("EFT") and upon the terms and conditions set forth in the HCK Hot Chicken Brand Standards Manual, and promptly upon Franchisor's request, Franchisee shall execute or re-execute and deliver to Franchisor such pre-authorized check forms and other instruments or drafts required by Franchisor's bank, payable against Franchisee's bank account, to enable Franchisor to draw Franchisee's Continuing Royalty, Brand Fund Contributions and other sums payable under the terms of this Agreement. Franchisee must at all times during the term of this Agreement (including any renewal terms) maintain at least one credit card account in good standing and with a minimum available credit line of $10,000.00 and complete the credit card authorization form which allows Franchisor to charge the credit card for any past due amounts owed to Franchisor or an approved supplier in the event an EFT payment is unsuccessful. Franchisor's current form of EFT authorization and credit card authorization is attached to the Franchise Disclosure Document in Exhibit I. Franchisee shall also, in addition to those terms and conditions set forth in the HCK Hot Chicken Brand Standards Manual, maint
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, if a franchisee is frequently delinquent in payments, Hck Hot Chicken can require the franchisee to instruct their bank to pay the Continuing Royalty, Brand Fund Contribution, and other fees directly to Hck Hot Chicken from the franchisee's account via electronic funds transfer (EFT) or another automatic payment mechanism.
To facilitate this, the franchisee must execute pre-authorized check forms or other drafts required by Hck Hot Chicken's bank. Additionally, the franchisee must maintain at least one credit card account in good standing with a minimum available credit line of $10,000 and complete a credit card authorization form, allowing Hck Hot Chicken to charge the credit card for any past due amounts if an EFT payment fails. The current EFT and credit card authorization forms are included as Exhibit I in the Franchise Disclosure Document.
The franchisee is also required to maintain a single bank account for these payments and maintain a minimum balance as specified by Hck Hot Chicken. The franchisee cannot alter or close this account without prior written approval from Hck Hot Chicken. Failure to implement the EFT system according to Hck Hot Chicken's instructions constitutes a material default of the Franchise Agreement.