How does a Big Apple Bagels franchisee pay the royalty fee?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Royalty Fee. Franchisee agrees to pay to Franchisor, via electronic bank draft as described below, a weekly royalty fee in the amount of five percent (5%) of the Gross Revenues of the BAGELS Store (as defined in Paragraph 8.c. hereof). The royalty fee shall be due on each Wednesday for the preceding "Reporting Week" (Monday through Sunday).
- f. Electronic Bank Draft Plan.
Franchisee shall make payments of the royalty fee, Marketing Fund contributions, and all other payments due Franchisor through an Electronic Bank Draft Plan on a bank account Franchisee is required to establish and maintain for the purpose of making payments to Franchisor.
Franchisee shall execute such documents as may be required from time to time by Franchisor to permit Franchisor to withdraw from Franchisee's general operating checking account the amounts due Franchisor.
The form authorizing the electronic bank draft is attached as Rider D.
- d.
Failure to Pay Royalty Fees or Marketing Fund contributions.
Franchisee shall pay Franchisor a fee of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th) day from the date performance is due, up through and including the day the default is cured, if Franchisee is in default in the payment of the royalty fee required under Subparagraph 8.b. or Marketing Fund contribution under Subparagraph 10.a.i.
- d. Interest on Late Payments. All royalty fees, Marketing Fund contributions and other amounts which Franchisee owes to Franchisor or its Affiliate shall bear interest after their due date at the lower of 2% per month, or the highest contract rate allowed by local law.
Franchisor may compound the interest on a monthly basis.
- b.
Failure to Report Gross Revenues.
Franchisee shall pay Franchisor a fee of Ten Dollars ($10) per day, beginning on the eighth (8th) day from the date performance is due, up through and including the day the default is cured, if he fails to report the Gross Revenues of the BAGELS Store as set forth in Subparagraph 11.b.i. by the stated deadline.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, franchisees are required to pay their weekly royalty fees via electronic bank draft. The royalty fee is 5% of the BAGELS Store's gross revenues. This payment is due every Wednesday for the preceding 'Reporting Week,' which runs from Monday through Sunday.
Big Apple Bagels requires franchisees to establish and maintain a specific bank account for the purpose of making payments to the franchisor. Franchisees must also execute documents that allow Big Apple Bagels to withdraw the amounts due from this account. The form authorizing the electronic bank draft is attached as Rider D.
Failure to report gross revenues by the stated deadline results in a fee of $10 per day, starting on the eighth day after the due date, until the default is resolved. Additionally, if a franchisee fails to pay the royalty fee when due, they will incur a fee of $100 per day, beginning on the fifteenth day from the date the payment was due, until the payment is made. All late payments, including royalty fees, are subject to interest accruing at the lower of 2% per month or the highest contract rate allowed by local law.