Does the initial franchise fee for Carbones Pizzeria cover any ongoing royalties or other fees?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
corporation or other entity.
- d. Franchisee acknowledges and agrees that Franchisor's remedy at law is inadequate and that in the event of any breach or threatened breach of the provisions of this Section Franchisor shall be entitled to temporary and final injunctive relief in addition to any other relief allowed by law.
5. Franchise Fees; Royalties.
- a. Franchisee shall pay to Franchisor an initial fee of Twenty-five Thousand Dollars ($25,000.00) (the "Franchise Fee"), payable in full upon the execution of this Agreement. It is expressly understood and agreed by the parties that the Franchise Fee is and shall be fully earned by Franchisor upon the signing of this Agreement and no part of the Franchise Fee shall be refunded to Franchisee for any reason whatsoever.
- b. In addition to the Franchise Fee, Franchisee shall pay to the Franchisor during the term of this Agreement, a "Royalty" as follows: (a) 4% of total Gross Sales on the initial $1,000,000 in Gross Sales per calendar year, at which point the Royalty is reduced to (b) 3% of Gross Sales on the next $1,000,000 per calendar year, at which point the Royalty is reduced to (c) 2% of Gross Sales over $2,000,000 in such calendar year.
- c. The Royalty shall be payable monthly on the 10th day following the end of each month. Franchisor shall aggregate its calculation of Gross Sales to include all of Franchisee's Carbone's Pizzeria restaurants during each month. Notwithstanding the foregoing, sales of alcohol by Franchisee at a facility which is a "fully licensed liquor establishment" licensed to sell alcohol shall not be included in the calculation of Gross Sales. Remittance of the Royalty shall be accompanied by reports of Gross Sales and other data upon forms provided by Franchisor from time-to-time.
Source: Item 5 — INITIAL FEES (FDD page 8)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, the initial franchise fee does not cover ongoing royalties or other fees. The initial franchise fee for a Carbone's Pizzeria franchise is $25,000, which must be paid when signing the Franchise Agreement. This fee is nonrefundable and is fully earned by Carbones Pizzeria upon signing the agreement.
In addition to the initial franchise fee, franchisees must pay ongoing royalties. The royalty structure is tiered based on gross sales: 4% of total gross sales on the initial $1,000,000 in gross sales per calendar year, then 3% of gross sales on the next $1,000,000 per calendar year, and finally 2% of gross sales over $2,000,000 in such calendar year. These royalties are payable monthly on the 10th day following the end of each month.
Franchisees are also required to pay an advertising fee of 1% of monthly gross sales, contributing to the Carbone's Pizza Advertising Fund. This advertising fee is capped, and is not due on gross sales exceeding $2,000,000 in any calendar year. These advertising fees are paid monthly, at the same time as royalty payments. Therefore, the initial franchise fee covers only the right to open a franchise and does not offset or include any of the ongoing royalty or advertising fees.