What is an 'Electronic Transfer Account' and what are the requirements for establishing one for a Monicals Pizza franchise?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
"Electronic Transfer Account" means an account established by Franchisee at a national banking institution approved by Franchisor and providing Franchisor with access to electronically withdraw or deposit any funds due to or from Franchisor;
Franchisor has the right to require all Royalty Fees, Marketing Fund Contributions, amounts due for purchases by Franchisee from Franchisor and other amounts due to Franchisor to be paid through an Electronic Transfer Account. At Franchisor's request, Franchisee shall open and maintain an Electronic Transfer Account, and shall provide Franchisor with continuous access to such account for the purpose of collecting any payments due to Franchisor or depositing residual payments or other payments due to Franchisee. Every month, Franchisee shall make timely deposits to the account sufficient to cover amounts owed to Franchisor prior to the date such amounts
are due. Franchisee shall be responsible for any fees or charges resulting from failure to make timely deposits. Franchisee shall execute any documents Franchisor's or Franchisee's bank requires to establish and implement the Electronic Transfer Account. Once established, Franchisee shall not close the Electronic Transfer Account without Franchisor's prior written consent.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, an Electronic Transfer Account is defined as an account established by the franchisee at a national banking institution approved by Monicals Pizza. This account provides Monicals Pizza with the ability to electronically withdraw or deposit funds owed to or from the franchisor.
Monicals Pizza has the right to require royalty fees, marketing fund contributions, amounts due for purchases from Monicals Pizza, and any other amounts owed to be paid through this Electronic Transfer Account. If requested by Monicals Pizza, the franchisee must open and maintain this account, granting continuous access to Monicals Pizza for collecting payments or depositing any residual payments or other payments due to the franchisee.
Each month, the franchisee is responsible for making timely deposits to the Electronic Transfer Account to cover the amounts owed to Monicals Pizza before the due date. The franchisee is also responsible for any fees or charges resulting from a failure to make these timely deposits. The franchisee must also execute any documents required by Monicals Pizza's or the franchisee's bank to establish and implement the Electronic Transfer Account. Once the account is established, the franchisee cannot close it without prior written consent from Monicals Pizza.