What is the minimum weekly Royalty Fee that a Beauty Bungalows franchisee must pay?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
- 5.03 Royalties. Franchise must pay to Franchisor a monthly royalty in the amount of five and one-half percent (5.5%) of Gross Revenue for the preceding calendar month with a minimum of $250 per week ("Royalty Fee"). The Royalty Fee is due to Franchisor, without notice from Franchisor, on the 10th day of each month. Royalties must be reported in a form specified by Franchisor.
- 5.04 Late Charges and Other Fees. Unless otherwise stated, Franchisee must pay a late fee of $100 for each day the Royalty Fee (or such other payment due under this Agreement) remains unpaid, provided, however, that the $100 per day late fee will not exceed $500 during any calendar month. Franchisee must also pay interest at the rate of one and one-half percent (1.5%) per month for any late payments due under this Agreement, or the maximum interest rate allowed by applicable law, whichever i
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, franchisees must pay a monthly royalty fee of 5.5% of gross revenue for the preceding calendar month. However, there is a minimum weekly royalty fee of $250. This means that even if 5.5% of a franchisee's gross revenue is less than $250 per week, they must still pay the minimum amount. The royalty fee is due on the 10th day of each month without notice from Beauty Bungalows.
For a prospective Beauty Bungalows franchisee, this means they need to ensure their weekly gross revenue is high enough to cover at least the minimum royalty fee of $250 per week. If their revenue is consistently low, they will still be obligated to pay this minimum, which could impact their profitability. This minimum royalty fee provides Beauty Bungalows with a guaranteed income stream, regardless of an individual franchisee's performance.
It's also important to note that late payments of the royalty fee can result in additional charges. Beauty Bungalows charges a late fee of $100 for each day the royalty fee remains unpaid, with a maximum late fee of $500 per month. Additionally, interest accrues at a rate of 1.5% per month on any late payments. Therefore, franchisees must prioritize timely royalty payments to avoid these extra costs.