How must the royalty fee be paid to Browns Chicken?

Question

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee on food sales1 | 5% of Gross Sales2 subject to modification as provided below. | Weekly | You must pay by automatic bank draft. |
| Video Gaming Royalty Fee | 10% of gross sales from Video Gaming revenue. | Weekly | You must pay by automatic bank draft. |
| Advertising1 | 4% of Gross Sales2 | Weekly | You must pay by automatic bank draft. See Item 11 regarding the Advertising Fund. |
| Advertising from Video Gaming Sales | 4% of gross sales from Video Gaming | Weekly | You must pay by automatic bank draft. See Item 11 regarding the Advertising Fund. |
| Additional Training for Franchisee | As Brown determines from time to time. Will include reimbursement of Brown's expenses. | At the time such training is provided. | See Item 11. |
| Audit | Cost of audit including reimbursement of all of Brown's expenses. | At the time of audit. | If you do not provide reports or other information as required and it is necessary to inspect or audit your books and records, or if you understate Gross Sales by more than 2%, you must pay all audit costs including attorneys' and accountants' fees. |
| Assignment or Transfer | $5,000. | Prior to consummation of transfer. | You may not assign your interest without Brown's consent. |
| Additional Training for Assignee Trainee | 20% of initial franchise fee. | Prior to consummation of transfer. | Any proposed assignee must be approved by Brown. |
| Renewal Fee | $5,000 | Upon renewal of Franchise Agreement |  |
| Interest | Maximum rate for open account business under applicable law, or if none, then at 1.5% per month. | As accrued. | All amounts due Brown including royalty fees, advertising and cost of products, will accrue interest after the due date if not paid in full. |
| Expenses of Enforcement | Actual expenses incurred by Brown including attorneys' fees. | On demand by Brown. | You must reimburse Brown for all expenses of enforcement of all agreements between you and Brown. |
| Type of Fee | Amount | Due Date | Remarks |
| Indemnification | All expenses incurred, including attorneys' fees and consequential damages. | On demand by Brown. | You must indemnify Brown and certain others against liability for claims arising out of operation of the Store. |
| Repairs or Insurance | All expenses incurred. | On demand by Brown. | If you fail or refuse to maintain the Store or obtain insurance coverage as required by Brown, Brown may effect necessary repairs and obtain insurance at your expense. The costs to do so will be withdrawn from your bank account via automatic bank draft. |
| Store Development and Set Up Fee | Up to $50,0003 | When you sign the Franchise Agreement. | See Note 3 below. |
| Lease Surcharge | Up to 15% of the rent Brown pays | When lease payments are due | See Note 4 below. |
| Processing Fee | $50 | On demand by Brown | Payable if your bank draft is dishonored for any reason |
| Penalty for Non- | $100 per day | Upon demand | See Note 5 below. |
| Compliance with |  |  |  |
| Franchise |  |  |  |
| Agreement |  |  |  |
| Testing Fee | Our costs | Upon demand | If you request us to evaluate a supplier that we have not previously evaluated |
| Document Name | $500 | Upon demand | If you request us to alter, add or modify the |
| Change Fee |  |  | name or identity of the Franchisee |
| Liquidated | $10,000 | Upon demand | Payable only if you abandon your Store or |
| Damaged |  |  | transfer it without our consent |

Source: Item 6 — OTHER FEES (FDD pages 13–15)

How must the royalty fee be paid to Browns Chicken?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Type of Fee	Amount	Due Date	Remarks
Royalty Fee on food sales1	5% of Gross Sales2 subject to modification as provided below.	Weekly	You must pay by automatic bank draft.
Video Gaming Royalty Fee	10% of gross sales from Video Gaming revenue.	Weekly	You must pay by automatic bank draft.
Advertising1	4% of Gross Sales2	Weekly	You must pay by automatic bank draft. See Item 11 regarding the Advertising Fund.
Advertising from Video Gaming Sales	4% of gross sales from Video Gaming	Weekly	You must pay by automatic bank draft. See Item 11 regarding the Advertising Fund.
Additional Training for Franchisee	As Brown determines from time to time. Will include reimbursement of Brown's expenses.	At the time such training is provided.	See Item 11.
Audit	Cost of audit including reimbursement of all of Brown's expenses.	At the time of audit.	If you do not provide reports or other information as required and it is necessary to inspect or audit your books and records, or if you understate Gross Sales by more than 2%, you must pay all audit costs including attorneys' and accountants' fees.
Assignment or Transfer	$5,000.	Prior to consummation of transfer.	You may not assign your interest without Brown's consent.
Additional Training for Assignee Trainee	20% of initial franchise fee.	Prior to consummation of transfer.	Any proposed assignee must be approved by Brown.
Renewal Fee	$5,000	Upon renewal of Franchise Agreement
Interest	Maximum rate for open account business under applicable law, or if none, then at 1.5% per month.	As accrued.	All amounts due Brown including royalty fees, advertising and cost of products, will accrue interest after the due date if not paid in full.
Expenses of Enforcement	Actual expenses incurred by Brown including attorneys' fees.	On demand by Brown.	You must reimburse Brown for all expenses of enforcement of all agreements between you and Brown.
Type of Fee	Amount	Due Date	Remarks
Indemnification	All expenses incurred, including attorneys' fees and consequential damages.	On demand by Brown.	You must indemnify Brown and certain others against liability for claims arising out of operation of the Store.
Repairs or Insurance	All expenses incurred.	On demand by Brown.	If you fail or refuse to maintain the Store or obtain insurance coverage as required by Brown, Brown may effect necessary repairs and obtain insurance at your expense. The costs to do so will be withdrawn from your bank account via automatic bank draft.
Store Development and Set Up Fee	Up to $50,0003	When you sign the Franchise Agreement.	See Note 3 below.
Lease Surcharge	Up to 15% of the rent Brown pays	When lease payments are due	See Note 4 below.
Processing Fee	$50	On demand by Brown	Payable if your bank draft is dishonored for any reason
Penalty for Non-	$100 per day	Upon demand	See Note 5 below.
Compliance with
Franchise
Agreement
Testing Fee	Our costs	Upon demand	If you request us to evaluate a supplier that we have not previously evaluated
Document Name	$500	Upon demand	If you request us to alter, add or modify the
Change Fee			name or identity of the Franchisee
Liquidated	$10,000	Upon demand	Payable only if you abandon your Store or
Damaged			transfer it without our consent