When is the Royalty Fee due for an All States M.E.D. franchise?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 6. OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee1 | 8% of Gross Revenues | Due monthly by the 10th of the month for the previous month | "Gross Revenue" means all of your revenue from operating the franchise, but excluding taxes collected from customers and paid to taxing authority, and reduced by the amount of any documented refunds, credits, allowances, and chargebacks the Business in good faith gives to customers. FA 3.2. |
| Local Advertising | The greater of 2% of Gross Revenues or $1,000 per month | Monthly | You are required to spend these sums on local advertising and promotions pursuant to our guidelines. FA 11.2. |
| Grand Opening Advertising | $3,000 - $10,000 | Around the time of opening | You agree to pay these sums to promote the opening of your business pursuant to our guidelines. FA 11.2. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the Royalty Fee is due monthly. Specifically, it is due on the 10th day of each month for the previous month's gross revenues. The Royalty Fee is 8% of Gross Revenues. Gross Revenues include all revenue from operating the franchise, excluding taxes collected from customers and remitted to taxing authorities, and reduced by documented refunds, credits, allowances, and chargebacks given to customers in good faith.
The FDD specifies that the Royalty Fee begins immediately in the first month the All States M.E.D. business is open for operation. Payment must be made according to the franchisor's specifications, and is payable via direct deposit. The Franchise Agreement's Schedule 5 provides further details on payment procedures.
All States M.E.D. retains the right to modify the timing and method of royalty fee payments, but they must provide written notice to the franchisee beforehand. This is a fairly standard clause in franchise agreements, allowing the franchisor to adapt to changing business needs or technological advancements in payment processing.