When is the royalty fee due for a Carbones Pizzeria franchise?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6. OTHER FEES
| (Column 1) Type of Fee1 | (Column 2) Amount | (Column 3) Due Date | (Column 4) Remarks |
|---|---|---|---|
| Royalty | 4% of Gross Sales on the initial $1,000,000 in Gross Sales per year, 3% of Gross Sales on the next $1,000,000 per year and 2% of Gross Sales on any additional Gross Sales over $2,000,000 per year. | Payable monthly on 10th day following the month covered | Gross Sales includes all revenues from the operation of the Restaurant including any delivery or off premises sales. Gross Sales do not include sales tax or use tax, non-food vending machine sales, revenue from alcohol sales, and discounts. |
| Advertising | 1% of total Gross Sales up to $2,000,000 per year. No additional fee for Gross Sales over $2,000,000 in that year. | Payable monthly on 10th day following the month covered | |
| Late Fee | 1.5% per month from date due, not to exceed the highest rate of interest allowed by law. | Upon demand | This fee is imposed by us if you do not pay amounts you owe |
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the royalty fee is payable monthly on the 10th day following the month covered. The royalty is 4% of Gross Sales on the initial $1,000,000 in Gross Sales per year, 3% of Gross Sales on the next $1,000,000 per year and 2% of Gross Sales on any additional Gross Sales over $2,000,000 per year. Gross Sales includes all revenues from the operation of the Restaurant including any delivery or off premises sales. Gross Sales do not include sales tax or use tax, non-food vending machine sales, revenue from alcohol sales, and discounts.
This means that a Carbones Pizzeria franchisee must calculate their gross sales for each month, excluding sales tax, use tax, non-food vending machine sales, revenue from alcohol sales, and discounts, and then pay the royalty fee by the 10th of the following month. The royalty fee is tiered, so the percentage paid decreases as the gross sales increase. This incentivizes franchisees to increase their sales, as the percentage of revenue paid to Carbones Pizzeria decreases as sales exceed certain thresholds.
Franchisees should be aware of the specific inclusions and exclusions from gross sales when calculating their royalty payments to ensure accurate reporting and avoid potential penalties. Failing to pay on time may result in a late fee of 1.5% per month from the date due, not to exceed the highest rate of interest allowed by law. Franchisees should also be aware that Carbones Pizzeria has the right to collect these fees by preauthorized check draft or pre-authorized credit card charge or electronic funds transfer/direct debit.