How is the Royalty fee paid by C3 Wellness Spa franchisees?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 6 OTHER FEES
| | | | | |---|---|---|---| | Type of Fee | | | | | (Note 1) | | | | | Royalty (Notes 2 and 3) | 6% of Gross Sales. Subject to adjustment and to alternative fixed fee royalty structure | Weekly on the Tuesday of each week for sales week ending the immediately preceding Sunday. | Will be debited automatically from your bank account by ACH or other means designated by us. If applicable laws or regulations prohibit a percentage-based royalty, then we may increase the royalty rate or, at our election, charge you a fixed fee royalty as set forth in Note 2. | | Brand Development Fund (Note 4) | Up to 3% of Gross Sales. Currently 1% of Gross Sales Maximum of $2,300 per week | Weekly on the Tuesday of each week for the preceding week | Will be debited automatically from your bank account by ACH or other means designated by us. We reserve the right to raise to 3% of Gross Revenues, subject to a maximum Brand Development Fund contribution of $2,300 per week. | | Local Marketing (Note 5) | Minimum of 2% of Gross Sales per month | As incurred | You must spend not less than 2% of your Gross Sales each calendar month on pre-approved marketing within your designated territory. | | Security System Fees (Note 6) | $50 per month | Monthly as invoiced | Paid with the first royalty payment of each month via ACH or paid directly to vendor. We have the right to increase the fee based on supplier pricing increases and introduction of new technology. | | POS System (Note 6) | Up to $3,250 per month | Monthly as invoiced | Monthly license for point of sale systems. Paid with the first royalty payment of each month via ACH or paid directly to vendor. We have the right to increase the fee based on supplier pricing increases and introduction of new technology. | | Technology (Note 7) | Up to $500 per month, currently not assessed | Monthly as invoiced | Payable to us or our designated supplier. | | Local and Regional Advertising Cooperatives (Note 8) | As established by cooperative members but not exceeding the local marketing requirements | As established by cooperative members | Established by cooperative members, but not to exceed local marketing requirements. |
| Supplier Review | Varies | Within 14 days of invoice | You must pay us the costs incurred by us to review and evaluate a potential supplier, product, or service that you submit to us for approval. |
|---|---|---|---|
| Costs, expenses, and legal fees | Costs incurred by us | On demand | For costs and expenses incurred by us in collecting fees due to us, and/or to enforce the terms of the Franchise Agreement or a termination of the Franchise Agreement. |
| Management Service | 20% of Gross Sales (plus our actual costs and expenses) | As invoiced | Payable if we elect to manage the Franchised Business due to death, disability, failure by you to have the Franchised Business managed by an authorized Managing Owner or Manager or other reason. |
Source: Item 6 — OTHER FEES (FDD pages 16–21)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the standard royalty fee is 6% of weekly gross sales. This royalty fee is paid weekly, specifically on the Tuesday of each week, covering the sales from the week ending the immediately preceding Sunday. C3 Wellness Spa requires that royalty payments be debited automatically from the franchisee's bank account through ACH or other means they designate. Franchisees must deposit all gross sales into bank accounts that are subject to ACH authorization.
C3 Wellness Spa mandates the use of pre-authorized payment, point of sale, automatic payment, automated banking, electronic debit, and/or electronic funds transfer systems. Franchisees are responsible for covering all service charges and fees imposed by their bank to facilitate these electronic debits. This ensures that C3 Wellness Spa can automatically deduct the necessary fees.
In certain situations, C3 Wellness Spa may implement an alternative fixed fee royalty structure. The fixed fee royalty structure varies depending on the number of weeks the franchise has been in operation. For example, during weeks 1 to 52, the fixed fee is $1,000 per week, increasing to $1,750 per week during weeks 53 to 104, and eventually reaching $3,750 per week from week 313 onward. During any renewal term, the fixed fee royalty will not be less than the minimum weekly royalty applicable in weeks 313 and after, and C3 Wellness Spa can increase this fee by no more than $150 per week within each calendar year of the renewal term.