Under what circumstances will the amount withdrawn by Boomerang Franchise, LLC from a Hyper Kidz franchisee's account not be the same each month?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
10.7.2 If you fail to provide the Royalty Report as required by Section 10.2, we may debit your account for one hundred twenty percent (120%) of the last Royalty Fee and Brand Development Fee that we debited. If the Royalty Fee and Brand Development Fee debited from your account are less than the Royalty Fee and Brand Development Fee you actually owe to us (once we have determined the Hyper Kidz Business's true and correct Gross Sales), we will debit your account for the balance of the Royalty Fee and Brand Development Fee due on the day we specify. If the Royalty Fee and Brand Development Fee debited from your account are greater than the Royalty Fee and Brand Development Fee actually owed, we will credit the excess against the amount we otherwise would debit from your account for the next payment due.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the amount Boomerang Franchise, LLC withdraws from a franchisee's account may vary from month to month under specific circumstances. If a Hyper Kidz franchisee fails to provide the required Royalty Report, Hyper Kidz has the right to debit the franchisee's account for 120% of the amount of the last Royalty Fee and Brand Development Fee that was debited.
Furthermore, if the amount debited based on the estimated Royalty Fee and Brand Development Fee is less than what the franchisee actually owes, Hyper Kidz will debit the account for the remaining balance. Conversely, if the initial debit is more than what was owed, Hyper Kidz will credit the excess amount to the franchisee's account, which will then be applied to the next payment due.
These adjustments ensure that Hyper Kidz receives the correct payments while also providing a mechanism for correcting any overpayments or underpayments. This process protects Hyper Kidz's revenue stream and offers some flexibility for franchisees, as overpayments are credited to future obligations rather than immediately refunded.