When is the Brand Development Fund Fee due for C3 Wellness Spa franchisees?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
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9.A. BRAND DEVELOPMENT FUND
At all times and from time to time, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, Franchisor may institute, implement, maintain, delegate and administer a brand development fund (the "Brand Development Fund"). The following shall apply to the Brand Development Fund at all times throughout the Term:
- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each weekly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than the lesser of: (i) 3% of the Gross Sales of the Franchised Business; or (ii) $2,300 for each weekly Accounting Period;
- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund. Upon su
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, if the Brand Development Fund is instituted, franchisees must pay the Brand Development Fund Fee on the Due Date. This fee is calculated as a percentage of Gross Sales for each weekly Accounting Period, as determined by C3 Wellness Spa.
The FDD specifies that franchisees will receive written notice of the percentage of Gross Sales they are required to contribute to the Brand Development Fund, and this percentage will remain applicable for each weekly Accounting Period until otherwise designated by C3 Wellness Spa in writing. The Brand Development Fund Fee is to be paid to C3 Wellness Spa on the Due Date, following the payment terms and methods outlined in Article 5.B for Royalty Fees.
However, the contribution is capped at the lesser of (i) 3% of the Gross Sales of the Franchised Business or (ii) $2,300 for each weekly Accounting Period. This provides a limit to the amount a franchisee must contribute, even if their gross sales would otherwise require a higher payment based on the percentage.