How long does the authorization for Kidokinetics to withdraw funds from the franchisee's account remain in effect?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee will, together with the submission of the Gross Sales Report, pay to Franchisor each Wednesday, via an electronic funds transfer program ("EFT Program") the Royalty and the Brand Development Fund, as defined and more particularly described in Article 13, then due. Franchisee must deposit all revenues from the operation of Franchisee's Kidokinetics Business into one bank account within three days of receipt, including cash, checks, and credit card receipts. Before opening Franchisee's Kidokinetics Business, Franchisee must provide Franchisor with Franchisee's bank name, address and account number, a voided check from the bank account, and sign and give to Franchisor and Franchisee's bank, all documents, including Attachment "G" to this Agreement, necessary to effectuate the EFT Program and Franchisor's ability to withdraw funds from such bank account via electronic funds transfer. Franchisee will immediately notify Franchisor of any change in Franchisee's banking relationship, including changes in account numbers. Franchisor reserves the right to require Franchisee to pay any fees due under this Agreement by such other means as Franchisor may specify from time to time. Franchisee's failure to allow electronic funds transfers on an ongoing basis is a breach of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to participate in an electronic funds transfer program (EFT Program) to pay royalties and brand development fund contributions. Before opening their Kidokinetics business, franchisees must provide their bank information and sign documents, including Attachment "G" to the Franchise Agreement, to authorize Kidokinetics to withdraw funds electronically. The FDD does not specify the exact duration of this authorization.
However, the agreement stipulates that franchisees must immediately notify Kidokinetics of any changes to their banking relationship, including account number changes. Furthermore, the agreement states that the franchisee's failure to allow electronic funds transfers on an ongoing basis constitutes a breach of the agreement.
Since the FDD does not state an explicit expiration date for the EFT authorization, it is implied that the authorization remains in effect for the duration of the Franchise Agreement, unless the franchisee changes their banking information or otherwise prevents the electronic funds transfers. A prospective franchisee should clarify with Kidokinetics the specific terms and conditions related to the duration and cancellation of the EFT authorization to fully understand their obligations.