When is the Royalty Fee due to the Franchisor for a Beauty Bungalows franchise?
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 is less Franchisee must pay any damages, expenses through appeal, collection costs, and reasonable attorneys' fees Franchisor incurs in connection with Franchisee's failure to make any required payments. We may charge you $500 if your business is not in compliance with our system specifications or this Agreement and you fail to correct the non-compliance after 30 days' notice. Thereafter, we may charge you $250 per week until you correct such non-compliance.
- 5.05 Site Selection Assistance Fee. If Franchisor provides multiple on-site visits at Franchisee's request or Franchisee otherwise requests additional site selection assistance, Franchisee will pay $500 per our employee, per day for each day that Franchisor provides on-site assistance ("Site Selection Assistance Fee"). Franchisee will also pay Franchisor's travel, meals and living expenses incurred for all on-site site selection assistance. The Site Selection Assistance Fee will be due in accordance with Franchisor's invoice prior to opening the franchised Business.
- 5.06 Technology Fee.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to the 2025 Beauty Bungalows Franchise Disclosure Document, the Royalty Fee is due to Beauty Bungalows Franchising, LLC on the 10th day of each month, without notice from the franchisor. This royalty is based on 5.5% of the Gross Revenue for the preceding calendar month, with a minimum of $250 per week. Franchisees must report these royalties in a format specified by Beauty Bungalows.
This means that as a Beauty Bungalows franchisee, you are obligated to calculate and remit your royalty payment by the 10th of each month. The amount will be 5.5% of your gross revenue from the previous month, but it must be at least $250 per week, ensuring a minimum payment even during slower periods. The franchisor does not send a reminder or invoice, so it is the franchisee's responsibility to ensure timely and accurate payments.
Failure to pay the Royalty Fee on time can result in penalties. Beauty Bungalows charges a late fee of $100 for each day the Royalty Fee remains unpaid, though this late fee is capped at $500 per month. Additionally, the franchisee will incur interest at a rate of 1.5% per month on any late payments, or the maximum rate allowed by law if lower. These late fees and interest charges highlight the importance of adhering to the payment schedule to avoid additional costs.
Beauty Bungalows also requires franchisees to authorize preauthorized payments for all royalty amounts owed to the company. This ensures that Beauty Bungalows can obtain payment for all royalty amounts as they become due by initiating a payment entry to the franchisee's account. Franchisees must provide their account number, name of financial institution, payment amount, and date on or immediately after which payment should be deducted from the account.