What is an 'Electronic Depository Transfer Account' or 'EDTA' for a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) You must sign and deliver to us all documents we require to authorize us to electronically debit your business checking account automatically for the Royalty, Brand Fund contributions and other amounts due under this Agreement and for your purchases from us and/or our affiliates ("Electronic Depository Transfer Account" or "EDTA"). Our current form of EDTA documents are attached as Exhibit 3. We will debit the EDTA for the amounts due under the Agreement on their due dates. You agree to ensure that funds are available in the EDTA to cover our withdrawals. We may require you to pay any amounts due under this Agreement or otherwise by means other than automatic, electronic debit (e.g., by check) whenever we deem appropriate, and you agree to comply with our payment instructions. If we supply products to you, we may require pre-payment or cash on delivery, depending on our then-current policies and your payment history with us.
- (3) If we determine that you have failed to correctly report the Gross Revenues of the Franchised Business via the POpS System, we may debit your EDTA for 120% of the highest monthly Royalty and Brand Fund contribution that we previously debited from your EDTA. Once we determine the amount you actually owe to us, we will debit the EDTA the difference, or we will apply a credit towards your next month's Royalty.
- (4) All other fees payable to us pursuant to this Agreement shall be paid by electronic debit from your EDTA as due.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to the 2025 Pump It Up Franchise Disclosure Document, an Electronic Depository Transfer Account (EDTA) is a mechanism that authorizes Pump It Up to automatically debit a franchisee's business checking account for various fees and payments. This includes royalties, brand fund contributions, purchases from Pump It Up or its affiliates, and any other amounts due under the Franchise Agreement. Franchisees are required to sign and deliver documents that allow Pump It Up to electronically debit their account. Pump It Up will debit the EDTA on the dates that payments are due.
Pump It Up requires franchisees to ensure that sufficient funds are available in the EDTA to cover these withdrawals. However, Pump It Up retains the right to request payment via other methods, such as checks, if they deem it necessary. Additionally, if a franchisee incorrectly reports gross revenues through the POpS system, Pump It Up may debit the EDTA for 120% of the highest monthly royalty and brand fund contribution previously debited. Once the actual amount owed is determined, Pump It Up will either debit the difference or apply a credit to the franchisee's next royalty payment.
In practical terms, the EDTA ensures that Pump It Up can efficiently collect ongoing fees and payments from franchisees. This system reduces the administrative burden of manual payments and helps maintain consistent cash flow for the franchisor. However, franchisees must carefully manage their account balances to avoid overdraft fees or other complications arising from insufficient funds. The EDTA agreement is part of the documentation required before a Pump It Up franchise can open for business.