What is the 'Balance Payment' for a Red Wagon Club franchise?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
Each month, on a date we determine (currently the 10th day of each calendar month), you will remit to us via electronic debit an amount equal to all payments due from you to us or our affiliates (other than Membership Fees), including but not limited to Program Fee payments and Brand Fund Contributions for the prior month (the "Balance Payment").
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, the Balance Payment is a monthly remittance franchisees make to Red Wagon Club via electronic debit. This payment covers all amounts due to Red Wagon Club or its affiliates, excluding Membership Fees. It includes items such as Program Fee payments and Brand Fund Contributions for the prior month.
The Balance Payment is due on the 10th of each calendar month. To facilitate these payments, franchisees must establish a business checking account with a vendor approved by Red Wagon Club and authorize Red Wagon Club to debit this account automatically through an Electronic Funds Transfer Authorization.
Prospective Red Wagon Club franchisees should be aware that they need to ensure sufficient funds are available in their business account to cover these withdrawals. This automatic debit system is a standard practice in franchising, designed to streamline payments and ensure timely receipt of fees by the franchisor. Franchisees should carefully track their monthly obligations to Red Wagon Club to avoid any insufficient funds issues, which can result in additional fees.