When does the obligation to pay the System Advertising Fee begin for a Burros Fries franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
State in which Franchisee's Business is located or any successor or substitute law (referred to as the "Default Rate"), until paid in full.
B. System Advertising Fee
Franchisee will pay a System Advertising Fee equal to one percent (1%) to three percent (3%) of Gross Revenues per calendar month to be paid in the same manner as the royalty obligation that begins immediately once the Business is open for operation and continues for the term of the Agreement (as defined in Section 10.A). The System Advertising Fee will commence at one percent (1%) and can be increased by us annually by no more than 1% upon 90 days' written notice to you and shall not exceed 3% of Gross Revenue per month for the term of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the obligation to pay the System Advertising Fee begins immediately once the Business is open for operation and continues for the term of the Franchise Agreement. This fee ranges from one percent (1%) to three percent (3%) of Gross Revenues per calendar month.
The System Advertising Fee is to be received by Burros Fries on or before the fifth (5th) day of each month for the prior month's Gross Revenue. If any payment is overdue, the franchisee will pay a fee of twenty-five dollars ($25), in addition to the overdue amount, and interest on such amount from the date it was due until paid at the rate of 1.5% percent per month or the maximum rate allowed by law.
Burros Fries can increase the System Advertising Fee annually by no more than 1% upon 90 days' written notice to the franchisee, but it shall not exceed 3% of Gross Revenue per month for the term of the Franchise Agreement. The System Advertising Fee will be deposited into the System Advertising Account for technology or new product development, kitchen equipment development, national advertising, or public relations programs.