Under what circumstances is the Management Service fee payable to C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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, a Management Service fee is payable under specific circumstances where C3 Wellness Spa elects to manage the franchised business. This election can occur due to events such as the death or disability of the franchisee, the franchisee's failure to have the business managed by an authorized Managing Owner or Manager, or for other reasons determined by C3 Wellness Spa.
If C3 Wellness Spa takes over management, the franchisee will be required to pay a Management Service fee. This fee is calculated as 20% of Gross Sales, in addition to C3 Wellness Spa's actual costs and expenses incurred during the management period. The fee is invoiced and must be paid as invoiced.
This arrangement ensures that C3 Wellness Spa can maintain the operational standards and brand integrity of the franchise even in situations where the franchisee is unable to manage the business effectively. However, it also represents a significant cost to the franchisee, potentially reducing profitability during the period that C3 Wellness Spa manages the location. Prospective franchisees should consider these potential costs and ensure they have a plan in place to address potential management gaps to avoid triggering this fee.