Where can I find the Royalty Fee for the Successor Term for a Buff City Soap franchise?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
eral Release | | Exhibit D | Form of Non-Disclosure and Non-Use Agreement | | Exhibit E | Disclosure Document Addenda Required by Certain States | | Exhibit K | Training Liability Waiver |
ITEM 23
RECEIPT
Duplicate copies of the receipt appear after the exhibits as Exhibit K to this disclosure document.
EXHIBIT A FRANCHISE AGREEMENT
Franchise Agreement
SUMMARY PAGE
These pages summarize certain provisions of the Franchise Agreement to which they are attached. The Franchise Agreement's provisions will control in the event of any conflict.
| Effective Date: | ||
|---|---|---|
| Designated Area: | ||
| Initial Franchise Fee: | $50,000 | |
| Royalty Fee: | 6% of Net Sales | |
| Brand Fund Contribution: | 2% of Net Sales | |
| Local Marketing Expenditure: | 1% of Net Sales | |
| Market Introduction Budget: | $15,000 | |
| Offering Fee: | $10,000 per Makery Included in Offering | |
| Successor Fee: | 50% of Then-Current Initial Franchise Fee | |
| Transfer Fee: | 25% of Then-Current Initial Franchise Fee | |
| Operator: | [] | |
| Franchisee: | [], a [] | |
| Address for Notices: | [] | |
| Attention: | [] | |
| Email: | [] | |
| Fran |
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap FDD, the Royalty Fee for the initial term is listed on the Summary Page as 6% of Net Sales. The FDD defines "Royalty Fee" as the continuing monthly royalty fee the franchisee must pay to the franchisor as set forth in Section 4(b). The "Successor Term" is defined as the 5-year period commencing after the expiration of the Initial Term or the first Successor Term, as applicable, in accordance with Section 3(b). However, the FDD does not specify whether the Royalty Fee remains the same during the Successor Term or if it changes.
Because the FDD does not explicitly state the Royalty Fee for the Successor Term, prospective franchisees should confirm with Buff City Soap whether the royalty fee remains at 6% of Net Sales or changes during any successor terms. Understanding this fee is crucial for projecting long-term profitability and assessing the overall financial viability of the franchise.
It is common in the franchise industry for royalty fees to remain consistent throughout the term of the agreement, including any renewal or successor terms. However, it is also possible for the franchisor to adjust the royalty fee to reflect changes in market conditions or the level of support provided to franchisees. Therefore, it is essential to obtain clarification from Buff City Soap to avoid any surprises and to make an informed investment decision.