When does the Royalty Fee obligation begin for an All States M.E.D. franchise?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
olicies.
NOTES
1Royalty Fee: The Royalty Fee begins immediately on the first month your Business is open for operation. The Royalty is due and payable monthly on the 10th day of each month, to be paid according to our specifications. Royalty and other fees shall be payable to us by direct deposit. See Schedule 5 of the Franchise Agreement. We reserve the right to change the time and manner of payment at any time upon written notice to you.
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ITEM 7. ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
**A.
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 obligation begins immediately on the first month the business is open for operation. The royalty fee is 8% of gross revenues. This fee is due monthly by the 10th of the month for the previous month. Gross revenue includes all revenue from operating the franchise, excluding taxes collected from customers and paid to a taxing authority. It is also reduced by the amount of any documented refunds, credits, allowances, and chargebacks the business gives to customers in good faith.
The royalty and other fees must be paid to All States M.E.D. by direct deposit. All States M.E.D. retains the right to change the time and manner of payment at any time with written notice to the franchisee.
It is common practice in the franchise industry to charge royalty fees based on a percentage of gross revenue. The specific percentage can vary widely depending on the brand, industry, and the level of support provided by the franchisor. Franchisees should carefully consider the royalty fee structure and ensure they understand how it will impact their profitability.