What happens if a Canine Dimensions franchisee does not report their Gross Sales?

According to Canine Dimensions's 2025 Franchise Disclosure Document, if a franchisee fails to report their Gross Sales, Canine Dimensions has the right to debit the franchisee's account for 120% of the last Royalty debited on the date the Royalty is due. If this amount is less than what the franchisee actually owes, Canine Dimensions will debit the account for the remaining balance on a specified day. Conversely, if the debited amount exceeds the actual Royalty owed, Canine Dimensions will credit the excess against the amount debited from the franchisee's account the following week. Additionally, the franchisee may incur a $45 late reporting fee. Franchisees are required to report Gross Sales by 5 PM eastern time on the first Wednesday of each month. Gross Sales includes all revenue from the sale of services and all other income related to the Franchised Business, but excludes discounts, refunds, and sales or use taxes.

This policy ensures that Canine Dimensions can still collect Royalty payments even if a franchisee fails to report sales figures. By debiting 120% of the previous Royalty, Canine Dimensions protects itself against potential underreporting. The reconciliation process, where overpayments are credited and underpayments are debited, aims to maintain accurate Royalty collection. The $45 late reporting fee incentivizes franchisees to submit their sales reports on time.

Prospective franchisees should be aware of these financial implications and ensure they have systems in place to accurately track and report Gross Sales by the specified deadline. Failure to do so can result in unexpected debits from their account and additional fees. Franchisees should also understand what constitutes Gross Sales according to the Franchise Agreement to avoid any discrepancies or disputes with Canine Dimensions.