Is the insufficient funds fee charged by Kidokinetics a penalty?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ghest rate permitted by law, whichever is lower.
- 5.6.3. Insufficient Funds Fee. In the event any of Franchisee's checks are returned, or an electronic funds transfer from Franchisee's bank account is denied for insufficient funds, Franchisee will pay Franchisor, in addition to the amount due, an Insufficient Funds Fee of fifty dollars ($50.00) or an amount equal to that charged to Franchisor by the bank, whichever is higher, per occurrence. This Insufficient Funds Fee is reasonably related to Franchisor's costs resulting from the delayed and declined payment, is not a penalty, and is in addition to any other rem
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the insufficient funds fee is not considered a penalty. If a franchisee's check is returned or an electronic funds transfer is denied due to insufficient funds, Kidokinetics will charge the franchisee an insufficient funds fee.
The fee will be $50.00 or the amount charged to Kidokinetics by the bank, whichever is higher, for each occurrence. Kidokinetics states that this fee is reasonably related to their costs resulting from the delayed and declined payment.
This fee is in addition to any other remedies Kidokinetics has available under the Franchise Agreement. This means that in addition to the insufficient funds fee, Kidokinetics may pursue other actions if a franchisee's payment is not honored by their bank.