What are the specific obligations of a Bombs Away franchisee regarding the payment of royalties, considering the information in Item 6 and the general obligations in Item 9?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Bombs Away Franchising within 15 days after invoice by Bombs Away Franchising accompanied by reasonable documentation.
4.7 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee, Marketing Fund Contribution, and any other amounts owed to Bombs Away Franchising by pre-authorized bank draft or in such other manner as Bombs Away Franchising may require. Franchisee shall comply with Bombs Away Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report monthly Gross Sales to Bombs Away Franchising by the 2nd day of the following month. If Franchisee fails to report monthly Gross Sales, then Bombs Away Franchising may withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last Gross Sales reported to Bombs Away Franchising, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Bombs Away Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Bombs Away Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed by law).
- (e) Costs of Collection. Franchisee shall repay any costs incurred by Bombs Away Franchising (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (f) Application. Bombs Away Franchising may apply any payment received from Franchisee to any obligation and in any order as Bombs Away Franchising may determine, regardless of any designation by Franchisee.
(g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Bombs Away Franchising any fees or amounts described in this Agreement are not dependent on Bombs
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees have specific obligations regarding royalty fee payments. Payments must be made via pre-authorized bank draft or another method Bombs Away requires. Franchisees must report monthly Gross Sales by the 2nd day of the following month. If a franchisee fails to report monthly Gross Sales, Bombs Away can withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last reported Gross Sales, with a later reconciliation to determine the actual fees. Bombs Away also has the right to remotely access the franchisee's point-of-sale system to calculate Gross Sales.
If a franchisee does not make payments on time, they will incur a $100 late fee, plus interest on the unpaid amount at a rate of 18% per year, or the highest rate allowed by law if 18% exceeds legal limits. Bombs Away may also charge $30 for any payment returned due to insufficient funds, or the maximum fee allowed by law if $30 exceeds legal limits. The franchisee is responsible for repaying any costs Bombs Away incurs while attempting to collect payments, including reasonable attorney fees. Bombs Away can apply any payment received from the franchisee to any obligation in any order it determines, regardless of any designation by the franchisee.
The franchisee's obligation to pay fees is independent of Bombs Away's performance, meaning franchisees must make all payments without offset or deduction. These payment terms are part of the franchise agreement, and failure to adhere to them can result in penalties and legal action. Franchisees should ensure they understand these obligations fully to avoid potential financial repercussions and maintain a good standing with Bombs Away.