How will Benjamin Franklin Plumbing estimate Gross Revenue if a report is not received?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee's Gross Revenue report required by Section 8 is not received when due, (i) all payments owed by Franchisee for such time period shall be deemed overdue until the reports are received by Franchisor, regardless of whether payment was actually made; (ii) Franchisee shall be responsible for applicable late fees and interest under Section 7.8 and (iii) Franchisor will have the right to estimate Gross Revenue (and Franchisee agrees that 15% greater than previously reported Gross Revenue is a reasonable estimate, among other methods to estimate) and to draft from Franchisee's bank account the estimated amount due for royalties, Brand Fund contributions, and any other charges that are calculated based on Gross Revenue.
When you provide the delinquent report(s), we will reconcile any difference between the estimated amount and the actual charges due for the period, and, if an overpayment, we will credit you on your next payment obligation to us.
- 7.8. Interest and Late Fees.
If any payment to us is overdue, you are required to pay us, in addition to the overdue amount, interest on the overdue amount from the date it was due until paid, at the rate of 12% per annum or the maximum rate permitted by law, whichever is less.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, if a franchisee fails to submit their Gross Revenue report on time, Benjamin Franklin Plumbing has the right to estimate the Gross Revenue for the period. One method Benjamin Franklin Plumbing may use to estimate Gross Revenue is to calculate 15% greater than the previously reported Gross Revenue. The franchisee is obligated to pay royalties, Brand Fund contributions, and any other charges based on this estimated Gross Revenue, which Benjamin Franklin Plumbing can draft from the franchisee's bank account.
If the franchisee later provides the missing report(s), Benjamin Franklin Plumbing will reconcile the estimated amount with the actual charges due. If the franchisee overpaid based on the estimate, Benjamin Franklin Plumbing will credit the overpayment to the franchisee's next payment obligation. This reconciliation process ensures that the franchisee is not unduly penalized for the late report, while also ensuring that Benjamin Franklin Plumbing receives timely payments.
It's important to note that late submission of the Gross Revenue report also triggers other penalties. All payments owed by the franchisee for the period are immediately deemed overdue, regardless of whether payment was actually made. The franchisee will also be responsible for late fees and interest on the overdue amount. This interest is calculated at a rate of 12% per annum or the maximum rate permitted by law, whichever is less. These measures incentivize franchisees to submit their reports on time to avoid additional financial burdens.