Is a Hyper Kidz franchisee required to authorize electronic funds transfer for fees?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
10.7.1 At our request, you must sign and deliver to us any documents we require, which may include the Electronic Funds Transfer Authorization attached hereto as Attachment 5, to authorize us to debit your operating account automatically for the Royalty Fee, Brand Development Fee, Technology Fee, and other amounts due under this Agreement. You agree to make the funds available for withdrawal by electronic transfer before each due date.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz may request that franchisees authorize electronic funds transfers for certain fees. Specifically, Hyper Kidz can ask franchisees to sign documents, including an Electronic Funds Transfer Authorization, to allow them to automatically debit the franchisee's operating account. This would be used for the Royalty Fee, Brand Development Fee, Technology Fee, and other amounts due under the Franchise Agreement.
This means that while not explicitly mandatory at all times, Hyper Kidz franchisees should anticipate the possibility of being required to use electronic funds transfer (EFT) for payments. The franchisee must ensure funds are available for withdrawal by electronic transfer before each due date. This requirement, if implemented, aims to streamline the payment process and ensure timely receipt of fees by Hyper Kidz.
Franchisees should be aware that Hyper Kidz retains the right to request this payment method. While the FDD language suggests it is 'at our request,' non-compliance could potentially lead to issues with the franchise agreement. Therefore, prospective franchisees should factor this potential requirement into their financial planning and operational procedures.