What section of the Apricot Lane FDD discusses the royalty fee?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
thstanding that changes may result in costs and expenses to Franchisee. Franchisee shall execute and perform such agreements ("Provider's Contracts") with the provider of the
E-Commerce Platform ("Provider") as Franchisor requires from time to time (including requirements authorizing independent access to the E-Commerce Platform and Usage Data by Franchisor). Currently, Franchisor has designated "Shopify" as the sole and exclusive E-Commerce Platform, but, as noted above, Franchisor reserves the right to change the E-Commerce Platform in the future.
All revenue and income of any nature earned or derived in connection with the E-Commerce Platform shall be part of Gross Revenues under Section 12C and subject to all of the provisions under this Agreement (including royalty fees and advertising contributions), provided however, the Royalty and advertising contributions under Sections 12A and 11B, respectively, relating to Gross Revenues derived from the E-Commerce Platform shall be five and one-half percent (5.5%) and one percent (1%), respectively, notwithstanding anything to the contrary by which Franchisee is entitled to pay lesser percentage amounts due to operating multiple Apricot Lane stores or otherwise.
Franchisee agrees that Franchisor, for and on behalf of Franchisee, may at its option (but shall not be required to) enter into the Provider's Contracts for Franchisee's E-Commerce Platform and to be the administrator thereof and have complete and unrestricted access thereto. In connection with such Franchisor-arranged E-Commerce Platform: (i) Franchisee shall remit to Franchisor (or, at Franchisor's direction, remit directly to the Provider) all fees, costs, expenses and reimbursements required to be paid to the Provider;
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane FDD, Item 23, titled "Receipts," discusses royalty fees. Specifically, it mentions that all revenue from the E-Commerce Platform is considered part of Gross Revenues under Section 12C and is subject to the agreement's provisions, including royalty fees.
The document specifies that the royalty fee for Gross Revenues derived from the E-Commerce Platform is five and one-half percent (5.5%). This rate applies regardless of any potential discounts a franchisee might otherwise be entitled to, such as those for operating multiple Apricot Lane stores.
This section also covers finance charges and late fees associated with royalty payments. The FDD states that all royalty payments bear interest after the due date at a rate of eighteen percent (18%) per annum, or the highest applicable legal rate, whichever is lower. Additionally, there is a late fee of Five Dollars ($5.00) per day for each day royalties are not paid after the due date. Furthermore, the franchisee is obligated to execute documents for electronic funds transfer (EFT) to pay all amounts due, including royalties.