When does the Antioch Pizza Shop franchisee begin paying the royalty fee?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Royalty Fee.
Franchisee shall pay to Franchisor, commencing on the date the Restaurant opens, a fee equal to five percent (5%) of the Gross Revenues generated by the Restaurant (the "Royalty Fee"). "Gross Revenues" means the entire gross receipts of every kind and nature from all products sold in or from the Restaurant or services performed by Franchisee including, without limitation, gross receipts from take-out orders, Delivery Services, Catering Services and special events, without reserve or deduction for inability or failure to collect and excluding only the following: (i) the amount of any sales tax levied upon retail sales which is payable to the appropriate governmental authorities (and subsequently actually paid to such authorities); (ii) gratuities and tips; (iii) sales of unredeemed gift cards; and (iv) refunds made in good faith to customers in accordance with Franchisor's policies.
- (c) Marketing Services Fee.
Commencing on the date the Restaurant opens through the remainder of the term of this Agreement, Franchisee shall pay to Franchisor a contribution toward Franchisor's marketing expenditures for the System equal to one percent (1%) of the Gross Revenues generated by the Restaurant (the "Marketing Services Fee").
- (d) Due Date.
Franchisee shall pay the Royalty Fee and Marketing Services Fee on a monthly basis on the seventh (7th) day of each calendar month with respect to the immediately preceding calendar month.
Payments shall be made by electronic funds transfer, and Franchisee shall execute the Exhibit E Electronic Funds Transfer Authorization attached hereto, and deliver such other instruments as are necessary and appropriate to effectuate such transfers.
Franchisor shall have the right to vary the frequency of the due date (e.g., from monthly to weekly) and the method of payment from time to time.
Royalty Fees and Marketing Services Fees are nonrefundable.
- (e) Nonpayment.
If Franchisor does not receive Franchisee's Royalty Fee, Marketing Services Fee or any other payment hereunder by the dates they are due, Franchisee acknowledges that, in addition to exercising all other rights and remedies that Franchisor has, Franchisor may terminate this Agreement upon notice to Franchisee.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Antioch Pizza Shop Franchise Disclosure Document, the franchisee is required to pay a royalty fee starting from the date the restaurant opens. This royalty fee is 5% of the Gross Revenues generated by the restaurant. Gross Revenues include all gross receipts from products sold or services performed, such as take-out orders, delivery services, catering, and special events, without deductions for collection failures. The only exclusions from Gross Revenues are sales taxes paid to governmental authorities, gratuities and tips, sales of unredeemed gift cards, and refunds made in good faith to customers.
In addition to the royalty fee, the Antioch Pizza Shop franchisee must also pay a Marketing Services Fee, which is 1% of the Gross Revenues, also commencing on the date the restaurant opens. Both the Royalty Fee and the Marketing Services Fee are to be paid monthly, specifically on the seventh day of each calendar month, covering the preceding month. Payments are to be made via electronic funds transfer, and the franchisee must complete an Electronic Funds Transfer Authorization form to facilitate these transfers.
Antioch Pizza Shop retains the right to modify the frequency of payments (e.g., from monthly to weekly) and the payment method as needed. It is important to note that both the Royalty Fees and Marketing Services Fees are nonrefundable. Failure to make these payments on time may result in the termination of the Franchise Agreement, in addition to any other rights and remedies available to Antioch Pizza Shop.