What are the 'Royalty Fees and Other Franchise Agreement Fees' that a Bang Cookies franchisee must acknowledge?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that pursuant to the terms of each respective Franchise Agreement respecting and/or concerning the Development Area and/or this Agreement, that nothing contained in this Agreement shall obviate and/or reduce Franchisees obligations as set forth in each respective Franchise Agreement including, without limitation, Franchisees obligations, respectively, to pay royalty and all other fees in accordance with each respective Franchise Agreement. Nothing contained in this Agreement shall modify, reduce or mitigate Franchisee's obligations to Franchisor. The only fee and right contained in the Franchise Agreement that is modified by this Agreement is the fixed one-time initial franchise fee paid by Franchisee to Franchisor at the time of signing the Franchise Agreement, as such initial franchise fee is set forth and defined in Section 4.2 of this Agreement as to the Development Shops.
Throughout the Term of this Agreement, Franchisee shall pay to Franchisor a continuing weekly nonrefundable royalty fee (the "Royalty Fee") in an amount equal to 6% (the "Royalty Rate") of Franchisee's weekly Gross Sales. The Royalty Fee shall be calculated on a weekly basis for each respective weekly Accounting Period. The Royalty Fee during any Renewal Term shall be determined by Franchisor but shall not be less than the Royalty Fee and Royalty Rate set forth in this Agreement. If any federal, state or local tax or withholding obligation, other than an income tax, is imposed on the Royalty Fee paid by Franchisee to Franchisor that, Franchisor cannot directly and, dollar of dollar, offset against taxes required to be paid by Franchisor under any applicable federal or state laws, then Franchisee must compensate Franchisor in amounts that offset the tax / withholding obligations.
On-Going Obligation: The Royalty Fee is an on-going obligation due from Franchisee to Franchisor, is payable in United States Dollars and, as designated by Franchisor, is to be calculated and paid weekly (unless another recurring Accounting Period is designated by Franchisor) on the Gross Sales for the previous weekly Accounting Period for each and every week throughout the Term of this Agreement and any applicable renewal term.
Payment and Due Date: Royalty Fee payments will be paid weekly and sent by ACH, electronic funds transfer, or as otherwise designated by Franchisor and shall be due on the Thursday of each weekly Accounting Period (for the preceding week and each week thereafter throughout the entire Term of this Agreement) or such other specific day of the week that Franchisor d
- "Annual Conference Attendance Fee" refers to and means an annual conference attendance fee to be paid by Franchisee to Franchisor in an amount determined by Franchisor but not to exceeding $1,500 annually.
Franchisee agrees that under no circumstance is Franchisee entitled to withhold payments due to Franchisor under this Agreement.
Franchisor has sole discretion to apply any payments received from Franchisee or to offset any indebtedness of Franchisee to Franchisor to any past due indebtedness of Franchisee for Royalty Fees, Advertising Contributions, purchases from Franchisor or its affiliates, interest or any other indebtedness of Franchisee to Franchisor or its affiliates.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees must acknowledge their obligation to pay royalty fees and other fees as outlined in their Franchise Agreement. The FDD specifies that the franchisee's obligations to pay royalties and all other fees in accordance with each respective Franchise Agreement are not reduced or obviated by anything contained within the agreement. The only fee modified by the agreement is the one-time initial franchise fee.
The Royalty Fee is an ongoing obligation, calculated weekly at 6% of the franchisee's weekly Gross Sales. These payments are nonrefundable and are due every Thursday for the preceding week. The franchisor can designate if payments will be sent via ACH, electronic funds transfer, or another method. The Royalty Fee during any Renewal Term shall be determined by Franchisor but shall not be less than the Royalty Fee and Royalty Rate set forth in this Agreement.
In addition to the royalty fee, franchisees may also be required to pay an Annual Conference Attendance Fee, not exceeding $1,500 annually, should Bang Cookies establish an Annual System Conference. Franchisees are responsible for all costs and expenses associated with Franchisee's travel to and attendance at the Annual System Conference. The FDD emphasizes that franchisees are not entitled to withhold payments due to Bang Cookies under any circumstances, including alleged non-performance by the franchisor. Bang Cookies retains the sole discretion to apply payments received from franchisees to any past due indebtedness, including Royalty Fees, Advertising Contributions, or any other debts owed to Bang Cookies or its affiliates.