What authorization must a Hydrodog franchisee give for electronic funds transfer?

According to the 2025 Hydrodog Franchise Disclosure Document, if Hydrodog requires franchisees to pay royalties via electronic funds transfer, the franchisee must authorize Hydrodog to initiate debit or credit correction entries to the franchisee's bank operating account. This authorization must be in a form designated or approved by Hydrodog. These electronic transfers will cover royalty payments and any other amounts due under the Franchise Agreement, including applicable interest charges.

This means that Hydrodog franchisees will need to grant Hydrodog access to their bank account for the purpose of withdrawing payments. The franchisee is responsible for ensuring that sufficient funds are available in the account on the designated Royalty Payment Day. The franchisee must also report their HydroDog Business's gross sales for the preceding week via telephone, electronic means, or in written form, as directed by Hydrodog.

This type of electronic funds transfer authorization is a fairly standard practice in franchising, as it allows franchisors to efficiently collect royalties and other fees. However, franchisees should carefully review the terms of the authorization and ensure they understand their obligations regarding reporting sales and maintaining sufficient funds in their account. Franchisees should also be aware of the potential risks associated with granting a third party access to their bank account and take steps to protect themselves from fraud or unauthorized withdrawals.