Does the Bombs Away initial franchise fee include any ongoing royalties?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 4.1 Initial Franchise Fee. Upon signing this Agreement, Franchisee shall pay an initial franchise fee in the amount stated on the Summary Page. This initial franchise fee is not refundable.
- 4.2 Royalty Fee. Franchisee shall pay Bombs Away Franchising a monthly royalty fee (the "Royalty Fee") equal to 8% of Gross Sales. The Royalty Fee for any given month is due on the 2nd day of the following month.
4.3 Marketing Fund Contribution.
- (a) Marketing Fund Contribution. Franchisee shall pay Bombs Away Franchising a contribution to the Marketing Fund (the "Marketing Fund Contribution") equal to 2% of Franchisee's Gross Sales (or such lesser amount as Bombs Away Franchising determines), at the same time as the Royalty Fee.
Source: Item 5 — INITIAL FEES (FDD page 9)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the initial franchise fee does not include ongoing royalties. Upon signing the franchise agreement, the franchisee must pay an initial franchise fee, the amount of which is stated on the Summary Page. This fee is non-refundable.
In addition to the initial franchise fee, Bombs Away franchisees are required to pay a monthly royalty fee. This royalty fee is 8% of Gross Sales and is due on the 2nd day of the following month.
Franchisees are also required to make a contribution to the Marketing Fund, which is 2% of the franchisee's Gross Sales. This contribution is paid at the same time as the royalty fee. Therefore, the initial franchise fee is separate from, and does not include, these ongoing royalty and marketing fund contribution obligations.