Under what conditions will the Electronic Funds Withdrawal Authorization for Kidokinetics 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 (EFT) program to pay royalties and brand development fund contributions. Franchisees must authorize Kidokinetics to withdraw funds from their designated bank account via electronic funds transfer. To facilitate this, franchisees must provide their bank name, address, account number, and a voided check, along with signing all necessary documents, including Attachment "G" to the Franchise Agreement, before opening their Kidokinetics business.
The Electronic Funds Withdrawal Authorization remains in effect as long as the franchisee is operating under the Franchise Agreement. Franchisees are obligated to maintain this EFT arrangement and must promptly notify Kidokinetics of any changes to their banking relationship, including account number changes. Failure to allow electronic funds transfers on an ongoing basis constitutes a breach of the Franchise Agreement.
Kidokinetics retains the right to request payment of fees through other means if deemed necessary. This ensures that Kidokinetics can collect the necessary fees for the franchise to operate and maintain brand standards. The EFT program is a standard practice in franchising, providing a reliable and efficient method for franchisors to receive payments from franchisees, while non-compliance can lead to penalties or termination of the franchise agreement.