Is there a cap on the amount of the Royalty fee that Annex Brands can charge?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee | 5% of Gross Receipts (2) | Each Wednesday, after the close of business, for the previous week ending Saturday | We may establish other due dates. You must report Gross Receipts each Saturday after the close of business before midnight for the week ending on that Saturday. You must pay us by automatic bank draft. (3) |
Source: Item 6 — OTHER FEES (FDD pages 24–32)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the royalty fee is calculated as 5% of gross receipts. The FDD does not specify a maximum or cap on the royalty fee percentage that Annex Brands can charge. Therefore, the amount paid in royalty fees will directly correlate to the gross receipts of the franchise location.
Gross receipts are defined as the total income from all sales of products and services, with specific exclusions such as sales, use, or service taxes collected and paid to taxing authorities, customer refunds and adjustments, and certain costs related to electronic transfers, money orders, and other services. Annex Brands retains the right to add additional exclusions to this list at their discretion.
As an Annex Brands franchisee, it's crucial to understand that the royalty fee is directly tied to your sales volume. While there's no stated limit, the percentage remains constant, meaning higher revenues will result in higher royalty payments. Prospective franchisees should consider this uncapped percentage when projecting expenses and profitability.