When will Ledgers draft the Royalty Payment from the franchisee's account?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
ill charge you for the settlement and you will reimburse us within the next normal payment cycle.
2.14. Audit Fee
You will pay to us our cost in performing an audit of your Franchise Business, plus a Late Fee of $50 per month on any late payment found through such audit if the audit discloses an under reporting of Gross Revenues or underpayment to us by 5% or more.
2.15. Payment Terms
Recurring fees: You are responsible for providing a monthly Royalty Report to us. The Royalty Report is due on the 10th day following the end of each month. The Royalty Report is used to calculate your Royalty Payments owed to us. Your Royalty Payments are due on the same date. You will execute an Automatic Bank Draft Authorization on a form substantially similar to that in Schedule 2. We will draft your Royalty Payment on the 10th day of each month or as soon thereafter as they are processed by us.
Other fees: We will provide an invoice to you for other fees incurred. Payment is due upon receipt. We will draft your account on the same date, or as soon thereafter as the draft is processed by us. We reserve the right to deduct monies that you owe to us from any monies that we pay to you.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, franchisees are required to submit a monthly Royalty Report to Ledgers by the 10th day following the end of each month. This report is used to calculate the Royalty Payments owed. Ledgers will then draft the Royalty Payment from the franchisee's account on the 10th day of each month, or as soon as possible after that date, depending on processing times. Franchisees are required to authorize these automatic bank drafts.
This means that a Ledgers franchisee must ensure funds are available in their account by the 10th of each month to cover the royalty payment. The exact amount will depend on the franchisee's gross revenue for the previous month, as calculated in the Royalty Report.
It's important to note that if an electronic transfer or other payment is declined, the franchisee will be charged a minimum of $50 per transaction. Additionally, overdue amounts are subject to a service charge of 1% per month on the unpaid balance, or the maximum rate allowed by law if lower. Therefore, maintaining accurate records and ensuring timely payments is crucial for a Ledgers franchisee to avoid incurring additional fees.