What is Franchisor's Optional Fixed Fee Royalty Fee for C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| Franchisor’s Optional Fixed Fee Royalty Fee Structure | |
|---|---|
| Weeks 1 to 52 | $1,000 per week |
| Weeks 53 to 104 | $1,750 per week |
| Weeks 105 to 156 | $2,500 per week |
| Weeks 157 to 208 | $3,000 per week |
| Weeks 209 to 260 | $3,250 per week |
| Weeks 261 to 312 | $3,500 per week |
| Weeks 313 and each week there after | $3,750 per week |
| Renewal Term: During any applicable renewal term, Franchisor’s Optional Fixed Fee Royalty Fee | |
| shall be determined by Franchisor but, shall not be less than Franchisor’s Optional Fixed Royalty | |
| applicable in weeks 313 and after and shall be subject to increase as determined by Franchisor | |
| provided that, within each calendar year of any renewal term, Franchisor shall not increase | |
| Franchisor’s Optional Fixed Royalty by not more than $150 per week. |
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, the franchisor has the option to charge a fixed royalty fee instead of a percentage of gross sales under certain conditions. This optional fixed fee royalty structure varies depending on the number of weeks the franchise has been in operation.
For weeks 1 to 52, the fixed fee is $1,000 per week. It then increases to $1,750 per week for weeks 53 to 104, $2,500 per week for weeks 105 to 156, $3,000 per week for weeks 157 to 208, $3,250 per week for weeks 209 to 260, and $3,500 per week for weeks 261 to 312. After week 313, the fixed fee is $3,750 per week.
During any renewal term, C3 Wellness Spa will determine the fixed royalty fee, but it will not be less than the fee applicable in weeks 313 and after. The franchisor can increase this fee, but not by more than $150 per week within each calendar year of the renewal term. This provides some predictability for franchisees regarding royalty fees during the renewal period.
This fixed fee structure may be implemented if any government regulation prohibits royalty fees based on gross sales related to services performed by an authorized care provider. The franchisor can also elect to increase the royalty rate on the permissible portion of gross sales to maintain the same net dollar amount they would have received without the restriction. This flexibility allows C3 Wellness Spa to adapt to changing legal landscapes while ensuring consistent royalty revenue.