When is the Bombs Away royalty fee due each month?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 6-8% of your gross sales | Monthly, on the 2nd day of the following month | We offer two options, a franchise fee of $15,000 with an 8% royalty fee or a franchise fee of $25,000 with a 6% Royalty Fee. See Note 1 and Note 2. |
Notes
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- "Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products sold by you, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected, (iii) sale of used equipment not in the ordinary course of business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
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- We currently require you to pay royalty fees and other amounts due to us by preauthorized bank draft. However, we can require an alternative payment method.
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the royalty fee is due monthly, specifically on the 2nd day of the following month. The royalty fee is a percentage of gross sales, with two options available to franchisees. Franchisees can choose a $15,000 franchise fee with an 8% royalty fee, or a $25,000 franchise fee with a 6% royalty fee.
In practical terms, this means that if a Bombs Away franchisee has $10,000 in gross sales for the month of January, they would need to pay either $600 or $800 in royalty fees (depending on which option they chose) by February 2nd. Bombs Away requires franchisees to pay royalty fees and other amounts due via preauthorized bank draft, but they can require an alternative payment method.
It is important for prospective Bombs Away franchisees to understand how "Gross Sales" is defined, as this is the base upon which the royalty fee is calculated. The FDD specifies that Gross Sales includes the total dollar amount of all sales generated through the business, whether for cash or credit, for any services or products. However, Gross Sales does not include bona fide refunds to customers, sales taxes collected, sale of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products (though the redemption of such cards is included).