Under what conditions can Buff City Soap modify the due date for the Royalty Fee?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (See Note 13) | Amount* | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (See Note 1) | 6% of Net Sales | Currently payable monthly based on the prior calendar month's Net Sales and due on the 15th of each month | Payment must be made via electronic funds transfer. We reserve the right to modify the due date to every Friday for the preceding week commencing Monday and closing Sunday upon 60 days' prior written notice. |
Source: Item 5 — INITIAL FEES (FDD pages 15–23)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, the Royalty Fee is currently 6% of Net Sales, payable monthly based on the prior calendar month's Net Sales and due on the 15th of each month. Payment must be made via electronic funds transfer. However, Buff City Soap reserves the right to modify the due date for the Royalty Fee under specific conditions.
Buff City Soap can change the due date to every Friday for the preceding week, commencing Monday and closing Sunday. This modification is based on Net Sales for that preceding week. However, Buff City Soap must provide 60 days' prior written notice to the franchisee before implementing this change.
This means that a prospective Buff City Soap franchisee needs to be aware that the payment schedule for Royalty Fees could shift from a monthly payment to a weekly payment. This could impact the franchisee's cash flow management and require more frequent monitoring of sales and payment processing. The 60-day notice period provides some time for franchisees to adjust to the new payment schedule, but it's crucial to understand the potential implications on their business operations.