Does Ledgers require franchisees to pay most fees via ACH electronic funds transfer?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 2: Before you may open for business, you must sign and deliver to us all bank documents needed to permit us to debit your bank account via ACH Electronic Transfer for all fees and payments due to us. If you change your bank account or transfer your account to a different bank, you must notify us within one day, and sign and deliver to us and the bank new documents to permit us to debit your bank account within three days. We require you to execute an Automatic
Bank Draft Authorization and pay most fees to us via ACH electronic funds transfer. See Schedule 2 to the Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 17–20)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, franchisees are required to authorize ACH electronic funds transfers for fee payments. Before opening their Ledgers business, franchisees must sign and deliver all necessary bank documents to allow Ledgers to debit their account for all due fees and payments. If a franchisee changes banks, they must notify Ledgers within one day and provide new bank documents within three days to maintain the ACH transfer authorization.
This requirement is formalized through an Automatic Bank Draft Authorization, which franchisees must execute. This system ensures that Ledgers can efficiently collect fees such as the royalty fee, which is 10% of gross revenues, and the advertising fee, which is 3% of the previous month’s gross revenues. Other fees, such as the Central Processing Services Fee, insufficient funds fee ($50 per transaction), audit fee (cost of audit plus $50 per month late fee), and transfer fee ($5,000), are also likely collected via ACH, though the document does not explicitly state that all fees are collected this way.
Requiring ACH payments is a fairly common practice among franchisors as it reduces administrative overhead and ensures timely payments. However, franchisees should be aware of the implications of granting Ledgers direct access to their bank accounts. It is crucial to maintain sufficient funds to avoid insufficient fund fees and to carefully monitor all deductions to ensure accuracy. Franchisees should also clarify with Ledgers whether there are any exceptions to the ACH payment requirement and what alternative payment methods, if any, are available.
Overall, the mandatory ACH payment system reflects Ledgers' effort to streamline financial transactions and maintain consistent revenue collection. Prospective franchisees should consider this requirement as part of their financial planning and due diligence, ensuring they are comfortable with the level of control Ledgers has over their bank account for fee payments.