When is the Balance Payment due to Red Wagon Club each month?

According to Red Wagon Club's 2024 Franchise Disclosure Document, the Balance Payment is due on the 10th of each month. Specifically, each month, on a date Red Wagon Club determines (currently the 10th day of each calendar month), franchisees must remit via electronic debit an amount equal to all payments due to Red Wagon Club or its affiliates, excluding Membership Fees. This includes Program Fee payments and Brand Fund Contributions for the prior month.

Red Wagon Club requires franchisees to authorize electronic fund transfers (EFT) to cover these payments. Franchisees must maintain sufficient funds in their business checking account to cover these withdrawals. This is a fairly standard practice in franchising, allowing franchisors to ensure timely payments and reduce administrative overhead.

Several other fees, such as the Program Fee and Brand Fund Contribution (if assessed), also share this due date. The consistent due date simplifies the payment process for franchisees. However, other fees like the Transfer Fee, Successor Franchise Fee, and various penalties (e.g., Non-Compliance Fee, Insufficient Funds) have different due dates, typically "as incurred" or "as required," depending on the specific event triggering the fee.

Prospective franchisees should note the importance of maintaining adequate funds in their business account to avoid insufficient fund fees, which are $250 per instance. Additionally, understanding the various fees and their respective due dates is crucial for managing cash flow and avoiding potential defaults under the Franchise Agreement.