What is the deadline for paying the royalty fee for Beard Papas in Item 6, and how is this payment collected?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 2: Royalty Fees – The royalty fee is a continuing monthly fee equal to 5% (the "Royalty Rate") of your monthly Gross Sales (the "Royalty Fee"). If any federal, state or local tax other than an income tax is imposed on the Royalty Fee which we cannot directly, and dollar for dollar, offset against taxes required to be paid under any applicable federal or state laws, you must compensate us in the manner prescribed by us so that the net amount or net effective Royalty Fees received by us is not less than 5% of your Gross Sales.
Note 1: Type of Fee – The above table describes fees and payments that you must pay to us, our affiliates, or that our affiliates may impose or collect on behalf of a third party. All fees are uniformly imposed for all franchises offered under this Disclosure Document, are recurring, are not refundable, and are payable to us, unless otherwise specified. If you enter into a Multi-Unit Development Agreement or open multiple Shops then these fees shall apply, respectively, to each and every Shop. Payment is subject to our specification and instruction, including, our election to have all fees automatically drafted from your business bank account or automatically debited or charged to your business bank account. You will be required to sign an ACH Authorization Form (Franchise Agreement, Exhibit 7) permitting us to electronically debit your designated bank account for payment of all fees payable to us and/or our affiliates. You must deposit the Gross Sales of your Shop into the designated bank accounts that are subject to our ACH authorization. You must install and use, at your expense, the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit and/or electronic funds transfer systems that we designate and require in the operation of your Shop. You must pay all service charges and fees charged to you by your bank so that we may electronically debit your bank account.
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the royalty fee is a recurring monthly fee, calculated as 5% of your monthly Gross Sales. This is referred to as the Royalty Fee. The method of payment is subject to Beard Papas's specifications and instructions, which includes the option for them to automatically draft the fees from your business bank account or automatically debit or charge your business bank account.
As a prospective Beard Papas franchisee, you'll be required to sign an ACH Authorization Form, which is included as Exhibit 7 in the Franchise Agreement. This form allows Beard Papas to electronically debit your designated bank account for all fees payable to them or their affiliates. You are also required to deposit the Gross Sales of your shop into designated bank accounts that are subject to their ACH authorization.
Furthermore, you must install and use the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit, and/or electronic funds transfer systems that Beard Papas designates for your shop's operation. You are responsible for paying all service charges and fees charged by your bank to facilitate the electronic debiting of your account by Beard Papas. If any federal, state, or local tax other than an income tax is imposed on the Royalty Fee which Beard Papas cannot directly offset against taxes required to be paid under any applicable federal or state laws, you must compensate them in the manner prescribed by them so that the net amount or net effective Royalty Fees received by them is not less than 5% of your Gross Sales.