Does My Salon Suite have the right to apply franchisee payments to past due debts?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
- **J.
Franchisor's Right to Apply Franchisee Payments**.
Notwithstanding any designation by Franchisee, the Franchisor shall have the sole discretion to apply any payments by Franchisee to any past due indebtedness of Franchisee in connection with payments due under this Franchise Agreement, amounts due in connection with purchasesfrom the Franchisor and any of its Affiliates, interest, or any other indebtedness.
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, My Salon Suite has the right to allocate a franchisee's payments towards outstanding debts. Specifically, My Salon Suite has the sole discretion to apply any payments from the franchisee to any past due indebtedness. This includes payments due under the Franchise Agreement, amounts owed for purchases from My Salon Suite and its affiliates, interest, or any other form of debt.
This provision means that even if a franchisee designates a payment for a specific purpose, such as the current month's royalty fees, My Salon Suite can instead apply that payment to older, unpaid debts. This could include overdue franchise fees, supply purchases, or interest charges.
For a prospective My Salon Suite franchisee, this clause highlights the importance of maintaining timely payments. Failure to do so could result in My Salon Suite reallocating current payments to cover past debts, potentially leading to further late fees or even a breach of the franchise agreement if current obligations are not met. Franchisees should ensure they have sufficient financial resources to cover all obligations to avoid triggering this clause.